W-9 Requirements for Sellers

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    UPDATE: On November 21, 2023, the Internal Revenue Service announced a delay for the implementation of the $600 gross sales 1099-K reporting threshold for online marketplaces, which was set to take effect for the 2023 tax year (2024 tax filing season). Therefore, for the 2023 tax year the IRS requires that we issue 1099-Ks for sellers with over $20,000 in completed gross sales AND over 200 transactions on any third-party marketplace. For the 2024 tax year (2025 tax filing season), the 1099-K reporting threshold has not been finalized, but the IRS announced that it is planning for a $5,000 threshold to phase in implementation of the $600 gross sales 1099-K reporting law.

    Marketplaces like Mercari are required to collect W-9 identification information from certain sellers to verify identity and tax reporting information. This W-9 information is also necessary to ensure timely and accurate filing of Form 1099-K with the Internal Revenue Service.

    Here’s what you need to know:

    • You’ll need to fill out a substitute W-9 form for your account before you meet or exceed the 1099-K gross sales filing threshold on Mercari.

    • We’ll send you a reminder when it’s time to submit your tax identification information.

    • If your gross sales reach the requisite reporting thresholds, at the end of the calendar year, Mercari will provide a 1099-K document which details your gross sales and other required and applicable information.

    Once you’ve gone through this process, your W-9 will be saved in your account so you can easily update and/or confirm your information each year. We’ve put together a helpful FAQ for you below to learn more about these requirements and the W-9 process.

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    Additional Questions

    How do W-9 and 1099-K work together?

    Consider the W-9 form as part of the input for the Form 1099-K. The information received from the Mercari verified W-9 form submission is used to distribute the 1099-K form to the correct individual, business entity, etc. and taxing authority during tax season.

    Input: W-9 and Completed sales

    W-9 Tax Identification information form

    • Legal first and last name (individuals) or legal name of entity

    • Tax Identification Number (e.g. social security number, employer identification number)

    • Mailing or registered address

    • Tax Classification (Reporting status for income tax purposes)

    Completed Sales

    Unadjusted Gross Payment calculation is determined by combining the following:

    • Item price

    • Buyer shipping fee

    • Sales tax charged to buyer (a separately stated sales tax paid by the Buyer at the time of purchase and remitted directly to the state under Mercari's sales tax registration)

    • Merchant Fees Charge to Buyer (any separately stated merchant fees charged to the Buyer, such as Zip or other payment financing fee).

    Output: 1099-K

    1099-K Tax reporting form

    • Issued to the individual or entity listed on W-9 form

    • Includes unadjusted gross reportable payments

    • Includes number of completed transactions aggregated from each unadjusted gross reportable payment

    • Only issued if individual or entity met the 1099-K reporting threshold for the calendar year

    How frequently will I need to update my W-9 information?

    Your W-9 information should be updated when there has been a change in your tax information, such as a last name change, change in address, change in tax classification, change in Tax Identification Number, etc.

    What if I don’t submit my W-9 information?

    If you don’t submit your substitute W-9 form when requested, your account and selling experience may be restricted. If you encounter account limitations due to missing W-9 information, you can provide your information at any time to begin resolving related restrictions.

    How can I check if I am getting close to the gross sales threshold?

    Sales are considered reportable and are aggregated toward the 1099-K threshold when the transactions complete. Please note that the completed date is not the same as the sold date, which is the date the item is purchased by the buyer. For example, if an item was purchased (sold) in late December, but the transaction was completed in the following January, it will be reportable on Form 1099-K for that January completion date.

    You can view your gross sales by logging in to Mercari.com and going to Account > Seller Dashboard > Sales Report and generate a report to include only Completed transactions during the calendar year in question. Gross sales includes the sold item’s price, buyer paid shipping, sales tax charged to buyer, and merchant fees charged to buyers. Gross means the total dollar amount of total reportable payment transactions without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts.

    What should I do with the 1099-K form?

    If you receive a 1099-K form, you should keep a copy of the 1099-K form with your tax records. This Form 1099-K should be considered at tax time as you may need this information for tax reporting purposes. We recommend that if you have questions about any tax reporting requirements, you should consult with your tax advisor, accountant and/or visit IRS.gov.

    Want to learn more about your 1099-K?

    Here are general IRS FAQs on this topic

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