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Do I Need a 1099-K Form For My Reverb Sales?

Please note that tax laws change frequently, and the below information is not tax or legal advice. You're responsible for any use of this information. Please consult an attorney or tax expert if you have any questions.

Depending on where you’re located and how much you’ve sold on Reverb, you may receive a Form 1099-K from Reverb. 

Based on federal IRS thresholds, Reverb is required to issue a Form 1099-K to you and the IRS if both of the following are true:

  • You have had $20,000 USD in sales through Reverb Payments during the calendar year.
  • You had 200 or more transactions during the calendar year.

Some states have different requirements. You’ll receive a Form 1099-K if you meet your state’s threshold in the calendar year: 

State Threshold

Arkansas

$2,500

District of Columbia

$600

Illinois

$1,000 and 4 or more transactions

Maryland

$600

Massachusetts

$600

Mississippi

$600

New Jersey

$1,000

Vermont

$600

Virginia

$600

If you meet both the federal IRS thresholds and a state-specific threshold, that info will be reported to both the IRS and the state tax authorities for your state. In this instance, Reverb will only send one Form 1099-K per shop. Reverb is required by US law to send out a 1099-K tax form.

Important: As of now, beginning in 2022, the federal threshold for issuing a 1099-K will drop to $600 with no minimum transaction level. Our team is advocating to increase the threshold and will keep impacted sellers updated with any changes that occur.

Filling out the 1099-K

If you meet the criteria listed above, you’ll get an email from Track1099 on behalf of Reverb with the Form 1099-K. A few things to keep in mind: 

  • It is important to fill out your information accurately and promptly, as failure to do so may require Reverb to withhold taxes from your future payouts to account for potential tax liabilities.
  • The Form 1099-K from Reverb reports the unadjusted gross sales you received through Reverb Payments during the last calendar year excluding only Marketplace Facilitator Taxes remitted by Reverb. This means that Reverb fees and any refunded orders do not reduce your total sales for the year. 
  • If you report Reverb sales activity on your personal tax return, you should fill out the W9 with your individual taxpayer name and ID. If your Reverb activity is part of a business, you should fill out the W9 with your business's legal entity name and EIN issued by the IRS.

FAQs & additional resources

Receiving a 1099-K from Reverb doesn't necessarily mean you'll have to pay income tax on what you've sold. We're required to issue 1099-Ks to every US seller who meets the federal or state threshold, but everyone's tax situation is different. For example, say a Reverber bought a guitar for $1,600 in 2019 and sold it for $1,000 in 2021. Reverb would still have to report the $1,000 payment on a 1099-K, but the seller would have no taxable income on this transaction to report since the resale amount was less than the original purchase price. Each Reverber will have to look at all their transactions both on and off platform in a given year to determine their taxable income.

While we can’t give you specific advice, we do want to give you the info you need to help make sense of the situation. We’ve included more information below. 

FAQs

What is a Form 1099-K?

A Form 1099-K reports payments you’ve received through a third party to the US Internal Revenue Services. Since Reverb processes payments for sellers through Reverb payments, we’re required by law to send out a 1099-K tax form to sellers who meet federal or state thresholds.

The Form 1099-K from Reverb reports the unadjusted gross sales you received through Reverb Payments during the last calendar year.  Unadjusted gross sales includes:

  • Sales
  • Shipping
  • Refunds
  • Selling fees 
  • Bump fees 
  • Credit card fees 

Note that there may be other fees in addition to those listed above in Reverb’s 1099-K calculations. Reverb’s 1099-K amount excludes Marketplace Facilitator Taxes remitted by Reverb on behalf of sellers. Reverb fees and any refunded orders do not reduce your total sales for the year. 

Don’t worry though—you only pay taxes on your income. For example, say a Reverber bought a guitar for $1,600 in 2019 and sold it for $1,000 in 2021. Reverb would still have to report the $1,000 payment on a 1099-K, but the seller would have no taxable income to report since the resale amount was less than the original purchase price. Each Reverber will have to look at all their transactions both on and off platform in a given year to determine their taxable income, and should consult a tax advisor with any questions. 

Visit the IRS website for more info on understanding your form 1099-K and instructions

What if I meet both the federal IRS and state threshold?

Reverb will only send one Form 1099-K per shop if you qualify on both state and IRS requirements. The information you provide will be reported to both the IRS and the state tax authorities. 

When will I get my Form 1099-K? 

If you meet the federal or state criteria, you’ll get an email from Track1099 (no-reply@track1099.com) on behalf of Reverb with the Form 1099-K. These emails may go into your junk folder, so we recommend adding this email address to your contacts. 

If you think you’ve met the 1099-K requirements through Reverb Payments within the calendar year but haven’t received an email with the Form 1099-K by January 31, email Reverb support

What’s the difference between providing a Social Security number or an employer identification number?

If you’re a sole proprietor—meaning you’re not a business entity that is a corporation partnership, or limited liability company—you will use your Social Security number for tax filing and reporting. Otherwise, you need a federal employer identification number (EIN) to pay taxes as a business. 

Even if you’re a sole proprietor, you can still opt to get an EIN. This gives you a few privileges: you can hire employees, incorporate, form a limited liability company or partnership, and have a solo 401(k) retirement plan. Using an EIN instead of a Social Security number can also help to protect against identity theft and establish you as an independent contractor, lending more credibility to your business. You can apply for an EIN from the IRS.

Why is Reverb sending me a 1099-K?

Reverb is required by law to report your payments to the IRS and/or your state via a Form 1099-K if you meet the federal or state thresholds outlined above. 

Will I need to fill out a 1099-K each year?

Yes, you will be required to fill out a 1099-K each year that you meet the IRS and/or your state’s threshold. 

Is my information secure?

To collect your information, we’ve partnered with Track1099, which is an IRS-approved service that is used by more than 300,000 businesses. For more information on the Track1099’s security features, visit their website

What happens if I don’t fill out the Form 1099-K?

If you don’t fill out your information accurately and promptly, Reverb may be required to withhold taxes from your future payouts to account for potential tax liabilities. 

Will I have to pay taxes on my Reverb sales?

Receiving a 1099-K from Reverb doesn't necessarily mean you'll have to pay income tax on what you've sold. We're required to issue 1099-Ks to every US seller who meets the federal or state threshold, but everyone's tax situation is different. For example, say a Reverber bought a guitar for $1,600 in 2019 and sold it for $1,000 in 2021. Reverb would still have to report the $1,000 payment on a 1099-K, but the seller would have no taxable income to report since the resale amount was less than the original purchase price. 

The above scenario is just an example. Please talk to your tax advisor for your shop’s specific circumstances and clarification on what to report on your year end filing.

Does this impact both new and used gear sales?

The requirements listed above are the same whether the threshold is met selling new or used gear. 

What if I have more than one Reverb shop?

Each shop, even if it is under the same TIN (“Taxpayer Identification Number”)—be it social security number or EIN ( Employer Identification Number)— is issued an individual 1099-K for their shop’s activity. We’re unable to combine shop activity at this time. 

What if I have additional questions?

If you have additional questions, we recommend consulting a tax professional. 

We’ve also compiled a few additional resources you might find useful: 

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