Amazon 1099K: Where Sellers Can Get It and How to Reconcile It

by Tomer

January 13, 2022

Have you received your 1099-K form? The Amazon 1099-K is necessary to fill out for a specific criterion of businesses that sell on Amazon.com.

If you’re wondering what the Amazon 1099-K is, how and when you can get it, and how to make sure it reconciles properly with your financial statements, this blog post is for you!

Read until the end to learn my personal bookkeeping tips that have saved me from a lot of stress as an Amazon seller!

Disclaimer: Sourcing Monster is not a tax professional and should not be relied on as one. None of the info in this blog post is financial advice. Consult your Certified Public Accountant (CPA) and accounting advisors for concrete advice.

How Can I Get My Amazon 1099K Form?

amazon 1099k

First and foremost, be aware that the Form 1099-K is not for everybody.

Amazon is only required to provide the form to sellers who:

  • Sell more than $20,000 in unadjusted gross sales on Amazon, and
  • Sell more than 200 transactions within the calendar year (from January through December)

This form is basically your annual report card for taxation purposes. If you do not meet both of the above-mentioned thresholds, you will not receive this form.

Amazon has an article describing the following as well:

Note: Certain states have a lower reporting threshold compared to the federal levels. Please consult with the IRS (Internal Revenue Service) or your tax professional adviser to understand if your state qualifies.

Are you an FBA seller outside the U.S.? Your requirements are slightly different in that case. For non-U.S. taxpayers who sell on Amazon, IRS regulations require a completed Form W-8BEN instead in order for sellers outside of the U.S. to be exempt from the U.S. tax reporting requirements.

Read more about it on Amazon’s Seller Central Help page here.

Method of Receiving

How exactly do you want to receive your Amazon 1099K Form?

If you want to receive it physically, Amazon mails it out on or before January 31st of the following tax year. If you want to receive it via electronic delivery, it gets emailed by January 31 of the following tax year. To be eligible for electronic delivery, Amazon requires that you re-take your Tax interview.

Downloading the Form 1099-K

To download your Form 1099-K from Amazon Seller Central, you’ll need to log in to your account and go to the “Reports” section.

From there, access the Document Library, choose the correct tax year, and then choose Form 1099-K.

You’ll now be able to download the form by clicking Download as PDF.

What if I Still Don’t Have It?

If you are expecting to receive it directly from Amazon and haven’t by January 31st, don’t panic!

Do keep an eye out for it, but make sure you still are proactive in contacting Seller Support to ask for it because you still need adequate time to work with your accountant in getting your taxes filed on time.

Getting the Form 1099-K On Time

To prevent delays in the first place, make sure that the information you provided in your Amazon Tax interview is updated, and that your other Tax information on Amazon Seller Central is updated as well.

Understanding the Amazon 1099K Form

A Form 1099-K from the IRS (Internal Revenue Service) is a form that is given to business owners to report their annual taxable income. It includes the gross amount of all reportable payment transactions.

Amazon makes it easier for sellers by providing it to them directly, so that sellers won’t have to worry about getting it from the IRS themselves.

The revenue figures you see on your Amazon 1099-K report is the total of the following:

  • Sales of products
  • Credits for shipping
  • Promotional rebates
  • Sales tax collected

Your books and records must accurately reflect your company’s income, including any amounts that may be disclosed on an Amazon 1099-K Form.

All income from your company must be reported on your income tax return. Gross receipts on income tax returns are the most common name for business income.

Consider the amounts shown on Form 1099-K, as well as all other payments received, when calculating gross receipts for your income tax return.

Most businesses get their income will be in the form of cash, checks, and debit/credit card payments. In the case of Amazon, sellers receive their income through payments to their bank account around every two weeks.

Therefore, it should be easier for Amazon sellers to trace their income because it all comes from one method.

Why Is It Important to Do Proper Bookkeeping?

amazon 1099k

Bookkeeping is important because it helps you keep track of your expenses and income. This information can be used to make informed business decisions, file your taxes correctly, and stay organized.

To put it simply?

-It can help you identify which deductions you qualify for

-It can help prevent you from overpaying your taxes or filing incorrect taxes

-It can help you keep track of your business income and expenses to measure your success

-It can help you understand your business’ financial health

-It can help you stay organized enough to make better business decisions

How To Reconcile Amazon 1099K to Financial Statements

Now that you know why proper bookkeeping is crucial, now you will notice how it actually helps you once you’re ready to file your taxes.

The main task and most important thing you need to do with your 1099-K Form once you receive it is to reconcile it with your other Amazon reports.

Reconciling your Amazon 1099-K Form with your other Amazon reports and financial statements means verifying that the total amount of sales reported on your 1099-K matches the total amount of sales reported on your official Amazon records.

This is especially important because the 1099-K is used as the basis for calculating your taxes.

To reconcile your reports, you’ll need the following information:

  • Amazon 1099K Report
  • Amazon Summary Seller Statement
  • Amazon Date Range Transaction Report

How to Download the Other Required Documents

amazon 1099k

When generating your Date Range Report, do the following on Amazon Seller Central:

  1. On Seller Central, go to the Reports section and find Payments. Select ‘Date Range Reports’.
  2. Click on ‘Generate Report’, then select report type: Transaction.
  3. Select reporting range: ‘Month’ or ‘Custom’, then enter the specified date information and click ‘Generate’.
  4. The report will download in CSV format.

You’ll need to download both the Standard Orders and Invoiced Orders (B2B) reports.

When generating your Date Range Summary Report, do the following on Amazon Seller Central:

  1. On Seller Central, go to the Reports section and find Payments. Select ‘Date Range Reports’.
  2. Click ‘Generate Report’, then select report type: Summary.
  3. Select reporting range: ‘Month’ or ‘Custom’, then enter the specified date information and click ‘Generate’.

You’ll need to download both the Standard Orders and Invoiced Orders (B2B) reports.

Provide them to your CPA after retrieving these reports and statements.

Your accountant will then have to compare the following:

– Total amount of sales reported on your Form 1099-K

– Total amount of sales reported on your Sales report in Amazon Seller Central

– Total amount of sales reported on your Itemized Sales report in Amazon Seller Central

Who Does The Reconciling?

So far, I have just provided you a guide to help you prepare the necessary documents.

It is not ideal to be done on your own. Miscalculating these can be a disaster for your business. You should hire a CPA to do taxes because it’s a complex process that requires specialized knowledge.

CPAs are experts in tax law and have the training and experience to ensure that your taxes are filed correctly. They can also help you find deductions and credits that you may qualify for, saving you money on your taxes.

Once you and your CPA have verified that the totals match, they will take care of all the necessary submissions.

Discrepancies

If there are any discrepancies between the reports, it is important to investigate what could be causing them and take corrective action quickly. Create a system as well to prevent this from happening again next year.

Some possible causes for discrepancies could include:

– Incorrect data in your reports

– Late or incorrect filings with Amazon

– Undelivered orders not reflected in your sales totals

– Sales not reported to Amazon because they were made through a third-party channel

It is alarming when you try to report less income than the income that is reflected on your 1099-K Form. In this case, you’ll have to get some help from your CPA to identify the cause of the inaccuracy, because Amazon may be recording your income in a different kind of structure.

My Bookkeeping Tips as an Amazon Seller

amazon 1099k

New Sellers tend to want to do their own bookkeeping by using a spreadsheet or a service like Quickbooks. It’s feasible when sales are low, but once your business starts picking up, you need to make the process easier for yourself.

I personally recommend Taxomate, it is more affordable than other popular options like A2X.

Taxomate automatically posts summarized transactions from your Amazon Seller Marketplace to Quickbooks Online. It tracks costs of goods sold as well as inventory valuation. There is a wide range of Taxomate pricing packages starting from $12 per month for syncing 500 monthly orders, and their largest package is $833 per month for syncing of up to 100,000 monthly orders.

What else do I recommend that you do?

  • Make sure to keep receipts for all business expenses and separate them clearly from personal expenses
  • Automate as many processes as possible
  • Keep a folder in Dropbox, Google Drive, or a similar storage service with all important financial statements. This way if there is ever an issue with one copy, you have others saved in different places.
  • Be in touch with your CPA more often throughout the year so that tax season won’t be as hectic and stressful

Conclusion

The Amazon 1099-K is an intimidating topic for many sellers because tax season can be stressful and nerve-wracking to get it all wrong.

I hope I was able to break down the basics of the Form 1099-K and what you need to provide to your CPA to make it a smoother process for you.

I always recommend that you work with a certified public accountant, because you end up saving money in the long run by not having to overpay taxes, and you certainly reduce the risk of getting fined by the IRS.

You are now better equipped with some of the aspects that you need to know. We have another article, Amazon FBA Taxes, that goes more in-depth about filing taxes.

Continue to read the Sourcing Monster blog for more seller advice!

About the author

This is Tomer, and I have created Sourcing Monster to share how I started my Amazon FBA business, and how I keep learning and growing. I will share tips proven methods that I USE currently in my Amazon FBA business so you can get value and growth hopefully for your business too! Feel free to comment or share any feedback down below!

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