Frequently Asked Questions about the 1099-K Form

What is the 1099-K Form?

The 1099-K form reports the total gross volume that passed through your FareHarbor account in the previous year. Total gross volume is a measure of all transactions in your FareHarbor account, before any adjustments were made for fees or refunds.

Our payment processor automatically generates 1099-K forms using the information within your FareHarbor account. The 1099-K form is formatted to show the total volume that passed through your account annually, split into monthly columns.

Your 1099-K form only includes credit card transactions because a 1099-K form, by IRS definition, is only issued for payment card transactions.

Should I have received a 1099-K form?

Your 1099-K form will be sent out to the mailing address you provided when starting with FareHarbor (unless subsequently updated). If you did not receive a 1099-K form, please contact FareHarbor Support for a digital copy.

Why does my 1099-K form not match my FareHarbor reporting?

Please note that your FareHarbor reports will not match your 1099-K form.

Because a 1099-K form is a report on total gross volume, it quite literally includes any and all monies that passed through your account. This includes bookings made, refunds processed, credit card processing fees, and booking fees.

For example, if you have a $100 booking that was cancelled and refunded, this would show in your 1099-K form as $200 gross volume, but would show in FareHarbor reports as $0 revenue.

How do I report my true earnings to the IRS?

The IRS is aware that a 1099-K form can be inaccurate due to it including all monies which moved through an account. The IRS suggests providing documentation to account for any earnings and deductions in conjunction with filing your 1099-K form.

View the IRS help page regarding 1099-K forms for more in-depth information.

Please reach out to Customer Support for a report detailing everything you will need to file your 1099-K form.

Why is the 1099k filed under my SSN and not the business EIN?

The 1099k is filed under your SSN or EIN. Its location depends upon how your business was registered at the time of onboarding.

The 1099k form will always use personal tax details if you chose individual as the business type.

The representative’s tax details will be used if you chose Single Member LLC or Sole Proprietorship as the business structure, as these account types are considered disregarded entities by the IRS for income tax purposes.

For additional information, please see the IRS website.

The table below shows which set of tax details Stripe will use for 1099 tax reporting:

Please reach out to our Support team if you need assistance updating this information.

Are affiliate bookings included in the 1099-K?

An affiliate booking may be included in your 1099-K, depending on who processed the payment for the booking.

• If the charter company collects the payment, the transaction will appear on the charter company’s 1099-K issued by FareHarbor and Stripe.
• If the affiliate collects the payment, the transaction will appear on the affiliate’s 1099-K instead.

Are API bookings included in the 1099-K?

No, API bookings are not included in the 1099-K issued by FareHarbor and Stripe.

Only transactions processed directly through FareHarbor via Stripe will appear on the 1099-K. Bookings made through API connections are handled and paid out by the connected platform. The connected platform is responsible for issuing its own 1099-K separately.

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Important notes about the 1099-K

• The 1099-K is based on Stripe’s fiscal period and reporting timezone.

• Here is more information about the 1099-K from Stripe’s website.

• For companies outside of the United States: Stripe does not issue end-of-year tax forms to users outside of the United States unless they are processing through a US bank account.

• In order for US clients to receive a paper copy of their 1099-K, their tax information must be accurately filled out in FareHarbor. This includes the company’s mailing address in Stripe (entered via the Payment Setup Checklist) and Tax ID.

  • Note: In some cases, clients will not have an EIN because they are a sole proprietor (an individual who owns their business and is personally responsible for its debts). Some sole proprietors have an EIN and some use a social security number instead.

  • This information is typically entered as part of the onboarding process; however, it’s possible for it to become outdated. If this happens, clients may not receive their 1099-K. If a client lets us know they have not received their 1099-K, follow the steps below to locate the form and send it to them.

Finding a client’s 1099-K

To retrieve a client’s 1099-K, please utilize one of the Workflows in the #1099 Slack channel by clicking on the lightening bolt in the #1099 room text box. Please note: it is expected that when you submit a workflow form, all pertinent information regarding the request has been added to the Zendesk ticket as an internal note. Please ensure that you never put sensitive business information in a Slack thread.

Note: the Stripe account ID can be located on the client’s Dashboard by going to Settings, Bank & Payments.

Workflows

1099-K Digital Copy Request – client is requesting a digital copy of the 1099-K, but does not require any changes to be made on the form.

1099-K Update Request – client is requesting to have one or more of the following updated:

Note: This information must be submitted in a ZenDesk ticket and assigned to PayOps queue.

• Business Name
• EIN
• Business Type (Individual, Sole Proprietorship, LLC – Single Member, LLC – C Corp Tax Class, LLC – S Corp Tax Class, LLC Partnership Tax Class, C Corporation, S Corporation, Partnership, Non-Profit)
• Address

1099-K Ownership Change and/or Split 1099-K – the ownership of the business was changed during the year and the new older and old owner need the business information updated. The following information is needed for both the new owner and old owner of the business:

Note: This information must be submitted in a ZenDesk ticket and assigned to PayOps queue.

• Business Name
• EIN
• Business Type (Individual, Sole Proprietorship, LLC – Single Member, LLC – C Corp Tax Class, LLC – S Corp Tax Class, LLC Partnership Tax Class, C Corporation, S Corporation, Partnership, Non-Profit)
• Address
• Date of ownership change (as specific as possible)

Someone from the @1099k-crew will make the requested 1099-K changes and/or generate a digital copy and link the document as an internal note in the provided ticket. You can then email the 1099-K to the client.

• Be sure to confirm the proper email address to send this to – ensure it is an owner of the account and not an employee or manager!
• Be sure to also confirm the physical address to which the 1099k was originally sent. This is located on the 1099k itself. It is the same address as the one entered in the customer verification. In the email, confirm the address to ensure future annual 1099-Ks can reach the client at that physical mailing address.

1099-K General Questions – the client has a general question about their 1099-K that does not fall into one of the other workflow topics. Prior to submitting this workflow, please ensure that you have reviewed all 1099-K help documentation. If you are still unable to answer the client’s question(s), submit the workflow and a member of the @1099k-crew will follow-up and provide guidance.

Account Management process for 1099-K requests

Please check this doc to ensure you are gathering and requesting information correctly. This includes digital copies, explanatory letters, correcting information, and making ownership changes.

Explanatory Letters

FareHarbor generates 1099-K Explanatory Letters for our clients as a courtesy to help explain the breakdown of the 1099-K form. This letter is available upon request and can be accessed by the FareHarbor employees to send directly to the client. Letters for 2020, 2019, and 2018 are available (we did not generate letters prior to 2018).

To access the client’s letter, go to the Client Taxes – Americas Shared Drive and click on the corresponding tax year. You can locate the letter by searching the shortname of the requesting client. Prior to sending the letter, ensure that the amount between the 1099-K and the Explanatory Letter are are equal.

Explanatory Letter FAQs

What is the line item titled Debits, Platform, Charges, etc?

Refunds that require a bank debit to process those refunds (debits), in addition to the FareHarbor online booking fees (platforms charges).

What should I do if I notice that the gross amount on the 1099-K and the Explanatory Letter do not match?

If the gross amounts are different or if you or the client have additional questions regarding the letter, please inform the @1099k-crew in the #1099 Slack channel by utilizing the Explanatory Letter Discrepancy workflow.

Troubleshooting

Here are some common questions we get and how to answer them.

Why does my 1099-K not match my FareHarbor reports? To answer this question, share this section of our client-facing documentation with the client.

Why does my 1099-K show my name under the Payee section? If a client enters the customer tax verification information and files as an individual, the 1099-K will be issued with their name and personal information attached.

If the client wishes to change this, you will need the following information:

• Legal Business Name
• Business Type: (Individual, Sole Proprietorship, LLC – Single Member, LLC – C Corp Tax Class, LLC – S Corp Tax Class, LLC Partnership Tax Class, C Corporation, S Corporation, Partnership, Non-Profit)
• Business EIN
• Address

List out all of the above information and the Dashboard’s Stripe account number in a ticket and put it in the Payment Operations Zendesk queue. Payment Operations will then complete the changes in Stripe. The Dashboard Stripe account number is found under Settings > Bank & Payments and in the table to the right that begins with acct_

Updating info when a 1099-K is under the wrong name/entity type/EIN

Use this process when we are updating account information in Stripe (ex. someone initially put down that they ran their business as an individual with their SSN vs an LLC with an EIN or the business has been sold to a new owner). Once you have confirmed you are speaking with the current owner and the updates are legitimate, please get the info outlined below:

• Name
• Legal Business Name
• Address
• EIN | SSN
• EIN issuance letter if changed
• Business Type: (Individual, Sole Proprietorship, LLC – Single Member, LLC – C Corp Tax Class, LLC – S Corp Tax Class, LLC Partnership Tax Class, C Corporation, S Corporation, Partnership, Non-Profit)

List out all of the above information and the Dashboard’s account number in the ticket and put it in the Payment Operations Zendesk queue as “Open”. Payment Operations will then complete the changes in Stripe.

On the ticket, make sure to put an internal note describing the request, e.g. “We need to change the account to have this new business information. We then need to regenerate the 2019 1099-K with the newly added owner’s information.”

Once the ticket is assigned as open to Payment Operations, utilize the Ownership Change workflow in the #1099 room.

You will be notified when the amended tax document is attached to the ticket and you can then pass it on to the client.

• Make sure to get the exact request from the client. “We need to regenerate the 2019 1099-K with the new owner’s information once it’s updated (all information in ticket)” is much better than “They need a new 1099-K”.
• We amend 1099-K documents based on client request and will re-send the corrected forms to the IRS. We have until March 31st to submit amended documents. We can reassure the clients that the corrected forms will be sent to the IRS.
• DON’T post personal information in Slack such as the SSN, EIN, etc. Please only add this information as an internal note on a ticket.

When clients ask to split the 1099-K (e.g. the business was sold on June 1st and they need a 1099-K from Jan 1 – May 31st for the old owner and a 1099-K from June 1st – December 31st for the new owner) in addition to the above corrections, we need to collect this information:

• Old business details:

  • Legal business name
  • Tax identification number
  • Billing address

• Date of Ownership Change (as specific as possible):

• New business info:

  • Legal business name
  • Tax identification number
  • Billing address

We can make sure to add this information to the ticket and specifically request a split 1099-K when posting in the #1099 room as shown above.

Can clients update their business information themselves?

YES! Clients can absolutely update their information. To make edits, the client needs to click “Update” in the Payment Setup Checklist in Bank & Payments. They will then be taken to the secure Stripe portal where they can make changes.

The only thing that the clients are unable to change themselves is the business type. To edit the business type, we will need to follow the same steps as in the above sections by listing all of the gathered information and the Dashboard’s account number in a ticket and placing it in the Payment Operations Zendesk queue. Payment Operations will then complete the edits in Stripe.

How can we update things like the listed business representative or business address if those change?

If clients are attempting to change information, then they should attempt to follow the steps in the prior section and update it directly in Stripe hosted onboarding. If it seems like they are unable to or are having trouble, then follow the steps below:

• Open Stripe hosted onboarding in the Dashboard and click “Update” in Bank & Payments. We are looking at Stripe hosted onboarding ourselves to verify the inability to edit if the client is having issues. We may also enter the information on behalf of the client if we can.
• If we are not able to make changes to info in Stripe hosted onboarding (the fields are grayed out, a field is missing, etc,) you should then assign the ticket as open to Payment Operations with the information that needs to be added.
• Payment Operations will facilitate the change with Stripe and, when the change is done, assign the ticket as open to Support for an agent to let the client know that the edits are complete.

PO Boxes

Stripe does not accept PO Boxes as valid business-registered addresses for compliance purposes. However, for their 1099k mailing, they can use a PO Box address.

If the client is worried about where their tax documents will be sent, we can reassure them that they will go to the address that they provided to us when they onboarded with FareHarbor.

Our clients can also request to receive the tax documents from FareHarbor by email. Their physical tax documents will still be sent to the mailing address listed in Stripe. They can update this information themselves in the Payment Setup Checklist under Bank & Payments or request a change from Support.

Ledgers

When using ledgers, we do not provide an individual 1099-K tax document for each ledger. If the client is utilizing multiple business entities and need multiple 1099-K documents, they will need multiple FareHarbor Dashboards.