1099-K Not Received from Square Despite High Barber Shop Revenue
Title: 1099-K Not Received from Square Despite High Barber Shop Revenue 1 I run a barber shop as an independent contractor and Square is my primary payment system. Just received an email from Square about 2022 stating I won't be getting a 1099-K form because I didn't meet their qualifications. Apparently, you need BOTH $20,000 in gross sales AND 200 card transactions to qualify. Here's what's weird - I definitely had around $95,000 in gross sales through Square, but somehow less than 200 transactions? That seems really off to me. This is the first year I haven't received a 1099-K from them. If I don't get this form, does that mean my Square income hasn't been reported to the IRS? I'm confused because I've always received one in previous years. Should I be concerned or is this normal?
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Javier Mendoza
12 That email is actually correct, but I understand why you're confused. The 1099-K reporting threshold does require BOTH $20,000 AND 200 transactions. It's a dual requirement. Even though your gross revenue is well above the dollar threshold at $95,000, if you had fewer than 200 separate payment transactions, Square isn't required to issue you a 1099-K. This isn't unusual for higher-priced services like barbering where you might have fewer, larger transactions. But here's the important part - this doesn't mean your income isn't reported or that you don't need to report it. You're still legally required to report ALL income on your Schedule C, regardless of whether you received a 1099 form or not. Square just doesn't have to generate the form if both conditions aren't met.
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Javier Mendoza
•7 That makes sense about the dual requirement, but what I don't understand is how I could possibly have less than 200 transactions with $95k in revenue. That would mean my average transaction is like $475+ which is WAY more than what I charge for haircuts. Something feels off with Square's counting method. Does anyone know how they calculate transactions?
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Javier Mendoza
•12 The transaction counting can be a bit confusing. Square counts "payment transactions" rather than individual customer visits. If you batch process payments or use certain Square features that consolidate multiple customer payments, they might count as single transactions. Some barbers who collect payments at the end of the day or week might have this situation. For your tax obligations, the transaction count doesn't matter at all - you still need to report all your income regardless of whether you receive a 1099-K. Square will have all your payment data available in your account reports that you can download for your records and tax preparation.
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Javier Mendoza
5 I was in exactly the same situation with my Square account for my mobile detailing business! After getting frustrated with the 1099-K confusion, I found this service called taxr.ai (https://taxr.ai) that helped me sort through all my payment records. They have this specific feature for independent contractors where you can upload your Square sales reports and it organizes everything for Schedule C reporting. Even without the 1099-K, it categorized all my Square income properly so nothing was missed. Their system also flags potential audit triggers related to payment app reporting, which gave me peace of mind that I wasn't making any reporting errors around this weird threshold issue.
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Javier Mendoza
•15 Does it handle other payment processors too? I use Square and Venmo and I'm worried about how all this gets reported correctly. Can it combine data from different sources?
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Javier Mendoza
•22 I'm skeptical about these tax services. How does it handle cash transactions mixed with card payments? And does it actually understand the difference between business and personal payments? Square doesn't always categorize them correctly.
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Javier Mendoza
•5 Yes, it handles multiple payment processors including Square, Venmo, PayPal, Cash App and others. You can upload data from all your sources and it consolidates everything into one organized report. It's been a lifesaver for me since I use different apps for different clients. As for cash transactions mixed with card payments, that's actually one of the features I found most helpful. The system has a smart categorization tool that lets you flag cash income and reconcile it with your records. It definitely understands the difference between business and personal transactions - it actually flagged several deposits that were personal transfers I had forgotten about, which saved me from incorrectly reporting them as income.
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Javier Mendoza
22 Just wanted to follow up about taxr.ai - I decided to try it despite my initial skepticism, and I'm actually impressed. Uploaded all my Square and Venmo data and it organized everything perfectly. The system even identified potential deductions I was missing related to my payment processing fees. What really won me over was how it handled those borderline personal/business transactions I was worried about. The categorization tool is surprisingly accurate, and when it wasn't sure, it flagged items for review rather than making assumptions. Saved me hours of sorting through transactions manually. Wish I'd known about this last tax season!
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Javier Mendoza
19 If you're having trouble getting information from Square about this, Claimyr (https://claimyr.com) might be worth checking out. When I had a similar issue with payment reporting, I needed to talk to an actual IRS agent but kept hitting the "call volume too high" message for WEEKS. Claimyr got me through to an IRS representative in about 25 minutes when I'd been trying for days. The agent confirmed exactly what I needed to do about reporting income without 1099-K forms. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c For barber shop income specifically, the IRS agent explained that many payment processors have different counting methods, but it doesn't change your reporting requirements. Having that official clarification directly from the IRS saved me a lot of worry.
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Javier Mendoza
•3 Wait, so this service just gets you through to the IRS faster? How does that even work? The IRS phone system is completely overloaded. I find it hard to believe anyone can bypass their system.
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Javier Mendoza
•16 This sounds shady. Why would I pay for something I can do myself by just calling repeatedly? And are you sure the IRS even gives advice about specific reporting situations over the phone? I thought they just directed you to their publications.
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Javier Mendoza
•19 It absolutely works! It uses a sophisticated system that navigates the IRS phone tree and holds your place in line. When it reaches an agent, you get a call connecting you directly. It's not bypassing anything - you're still in the same queue, but the system does the waiting for you instead of you having to stay on hold for hours. The IRS representatives absolutely can and do provide guidance on reporting requirements. While they won't give tax advice in terms of strategies, they will clarify reporting obligations. The agent I spoke with specifically addressed payment app reporting thresholds and confirmed that all business income must be reported regardless of whether a 1099 was issued.
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Javier Mendoza
16 I have to eat my words about Claimyr. After my skeptical comment, I decided to try it the next day when I got frustrated with being on hold for 2+ hours trying to sort out this exact 1099-K issue. The service actually worked exactly as described. I got a call back in about 40 minutes connecting me to an IRS agent. The agent confirmed that many business owners are confused about the payment app reporting thresholds, and clarified that I still need to report all income on Schedule C regardless of whether I receive a 1099-K. They also explained that payment processors use different methods to count "transactions" which explained why my numbers seemed off. Definitely worth it just for the time saved not being on hold all day.
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Javier Mendoza
8 Has anyone else noticed that Square's transaction counting seems really inconsistent? I'm also under the 200 transaction threshold according to them, but I definitely had more individual customers than that. I'm wondering if they're counting batched payments differently.
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Javier Mendoza
•10 Yeah, it's weird. I called Square support about this and they explained that if you use certain Square features like "Close Drawer" or if you process multiple payments at once through their system, it might count as fewer transactions. Also, their count is based on payment transactions, not individual customers or services provided. If you process a day's worth of cuts as a single batch, that's just one transaction in their system.
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Javier Mendoza
•8 Thanks for this info! That explains a lot. I close my drawer once a day usually, which would mean all those individual haircuts are being counted as a single transaction. No wonder I'm not hitting 200 transactions despite having way more customers.
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Javier Mendoza
23 Just to clarify for everyone - the 1099-K threshold was actually supposed to change to $600 with NO minimum transaction count for 2022, but the IRS delayed implementing that change. They're sticking with the $20k AND 200 transactions rule for now, but be aware this will likely change in the future. When it does change, most of us with payment apps will get 1099-Ks even for much smaller amounts. So keep good records now and get in the habit of properly categorizing all your income. The IRS is getting more serious about payment app reporting.
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Javier Mendoza
•17 Do you know if they've announced when that $600 threshold will actually take effect? I keep hearing different things. Is it for 2023 tax year (filing in 2024) or pushed back again?
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