Reporting, Taxes and 1099 Responsibilities
Servable makes it easy to manage reporting and taxes for contract work. If you’re hiring contract workers for personal or business purposes, or if you’re working as an independent contractor for other people, this article will help you understand the steps you need to take.
As with all financial reporting and tax issues, you should always get the guidance of a trusted, certified, seasoned expert. This article is not intended to serve as that type of professional advice - it’s here to help you and your tax/finance professionals understand how to use Servable in the best and most efficient manner.
2. Managing Contract Workers Through Servable
Am I responsible for filing tax forms for any service providers?
One of the many advantages of paying your contract workers, freelancers and other non-employee service providers through Servable is that you should not be required to file US tax forms (1099-MISC, 1099-K, etc.) for those service providers.
You should not use Servable to pay any service provider you classify as an employee.
You do not need to send or file Form 1099-MISC for your payments to the independent contractors you’re paying through Servable. Servable (either directly or through our designated third-party) will file any required 1099 forms with federal and appropriate state government entities.
All service providers who use Servable will be required to submit information for Form W-9 (US-based) or Form W-8BEN (international) to Servable or our designated third party.
Why don’t I have to send a 1099-MISC?
Because you pay your service providers through Servable instead of paying them directly, the general principle that you should send a Form 1099-MISC when paying for the services of an independent contractor does not apply.
Under the new Internal Revenue Code Section 6050W, Servable (or our designated third-party) is a payment settlement entity and/or electronic payment facilitator, so we are required to report the payments remitted through our platform to service providers, if at all, on the Internal Revenue Service (IRS) Form 1099-K, in accordance with IRS regulations. When payment amounts are reportable on a Form 1099-K, they need not be reported on a Form 1099-MISC.
This is true even if your service provider does not receive enough payments for Servable or our designated third-party to report on them specifically. The fact that it is the Servable platform (or our designated third-party) is considered a “third party network” under the tax rules is the determining factor. To learn more about form 1099-K, see the IRS website.
Do I need to send any tax forms or reporting forms to Servable?
If you use Servable to manage and pay service providers, you do not need to supply Servable with any tax forms.
Regardless of tax reporting, how do I find out how much I’ve paid different service providers?
If you need detailed reports for your own accounting, tracking or other purposes, you can navigate to the service for which you need the reports, and find various options in the menu. You may download this information as a spreadsheet to use it for your own purposes.
3. Working as an Independent Contractor Through Servable
What forms will I receive?
You will receive a Form 1099-K from Servable if your use of the platform warrants such a form be filed (generally, if you earn more than $20,000 from over 200 transactions during the year). To learn more about Form 1099-K, see the IRS website.
Individuals or businesses to whom you provide services through Servable are not required to provide you with any tax forms.
What information do I need to provide?
If you’re a service provider, you must provide information for Form W-9 (US-based) or Form W-8BEN (international). You will be notified at the appropriate time to provide this information.
4. Managing a Service Marketplace Through Servable
As the owner of a service marketplace, what forms will I receive?
When you use Servable to manage a service marketplace, you will earn income unless you have deactivated payments. You will not receive any tax-related forms if you have deactivated payments, or if you haven’t deactivated payments yet don’t earn any money during the year,
If you have not deactivated payments and you earn income from the service marketplace(s) you manage in Servable, your income will be taxed by the IRS and it is your responsibility to accurately report that income. If your service marketplace generates more than $20,000 of payouts to you from more than 200 service request transactions, Servable (or its designated third-party) will provide you with the required IRS Form 1099-K. This form provides you with information about the amounts that Servable paid to you. Servable will also provide this information to the IRS in compliance with relevant regulations. To learn more about form 1099-K, see the IRS website.
What information do I need to provide?
If you’re the owner of any service marketplaces on Servable from which you earn any money (via a service fee, booking fee or otherwise), you must provide information for Form W-9 (US-based) or Form W-8BEN (international). You will be notified at the appropriate time to provide this information.
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