How does the IRS treat cryptocurrency income on a 1099-K versus a 1099-MISC?

3 answers

• Dec 16, 2021 · 3 years ago
  When it comes to reporting cryptocurrency income to the IRS, there are differences between a 1099-K and a 1099-MISC form. A 1099-K is typically used by payment settlement entities, such as cryptocurrency exchanges, to report the gross amount of payments made to a taxpayer. On the other hand, a 1099-MISC is used to report miscellaneous income, including income from freelance work or independent contractor services. So, if you receive cryptocurrency income from selling goods or services as an independent contractor, it may be reported on a 1099-MISC form. However, if you receive cryptocurrency income from a payment settlement entity, it will likely be reported on a 1099-K form. It's important to accurately report all cryptocurrency income to the IRS, regardless of the form it is reported on.
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• Dec 16, 2021 · 3 years ago
  The IRS treats cryptocurrency income on a 1099-K differently than on a 1099-MISC. A 1099-K is considered a third-party settlement organization (TPSO) report, which means that the IRS receives information about your cryptocurrency transactions directly from the payment settlement entity. This includes the gross amount of payments made to you. On the other hand, a 1099-MISC is a form that is typically used to report miscellaneous income, including income from self-employment. If you receive cryptocurrency income from a TPSO, it will be reported on a 1099-K. However, if you receive cryptocurrency income from other sources, such as freelance work or independent contractor services, it may be reported on a 1099-MISC. It's important to carefully review and report all cryptocurrency income to ensure compliance with IRS regulations.
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• Dec 16, 2021 · 3 years ago
  The IRS treats cryptocurrency income differently depending on whether it is reported on a 1099-K or a 1099-MISC. A 1099-K is used by payment settlement entities to report the gross amount of payments made to you. This form is typically used for income received from sales of goods or services. On the other hand, a 1099-MISC is used to report miscellaneous income, including income from freelance work or independent contractor services. If you receive cryptocurrency income from a payment settlement entity, it will likely be reported on a 1099-K. However, if you receive cryptocurrency income from other sources, it may be reported on a 1099-MISC. It's important to accurately report all cryptocurrency income to the IRS, regardless of the form it is reported on, to avoid any potential penalties or audits.
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