Shopify reports your income to the IRS in the form 1099-K. As a seller, you can use this form to report transactions from payment cards and third-party payment networks to the IRS.
Sales Tax and Nexus
Shopify collects and remits sales taxes on applicable transactions. If you have a physical presence in a state, you must collect sales tax from customers in that state. Shopify can automatically calculate, collect and remit the right sales tax amount to the appropriate states. To get started, you’ll need to set up your shop’s location and enable taxes in your Shopify admin.
1099-K Eligibility and Store Reporting
Historically, owners with over 200 transactions and $20,000 in Shopify payments or PayPal received a 1099-K form. You will get a separate form for each store. Understanding your Shopify data is key for any online business. Shopify reports and analytics provide real-time feedback on campaign performance, allowing you to make informed decisions and improve results.
Conclusion
Remember to accurately track your sales and expenses to ensure the information reported to the IRS is correct. The calculations and reports Shopify provides should assist you when it’s time to file and pay your taxes.