If you use Client billing with your projects, you may receive Form 1099-K for tax purposes.
In this lesson, you’ll learn about Form 1099-K with the following:
- Understand the Form 1099-K
- Who receives Form 1099-K
- Who provides Form 1099-K
- What to do if you have received Form 1099-K
Note: The following information has been compiled in accordance with IRS guidance for 2020; however, this guidance is subject to change. Webflow will update this information as needed to ensure compliance with IRS regulations for future years, if and when available.
Understand the Form 1099-K
The Form 1099-K reports payment transactions made through third-party payment processors and credit card processors. Webflow’s Stripe platform is considered a third-party processor and is used to process Client billing payments.
Who receives Form 1099-K
If you use Client billing and meet all the following criteria, you will receive a Form 1099-K:
- You had transactions of more than $20,000 USD in total gross volume from your Client billing accounts
- Had more than 200 Client-billed charges
- Are subject to United States taxes
Even if you do not meet all of the above 3 criteria, you may still receive a 1099-K, which is determined by the state policy where you live (policies vary by state). Review your state’s policy.
Who provides Form 1099-K
Webflow issues 1099-K forms by January 31 each year. Most commonly, the forms will be emailed to you from Webflow’s Track1099 platform (an IRS-approved vendor), which will prompt you to “accept” the electronic copy. In the event that you haven’t accepted the electronic copy, Webflow will issue a mailed copy to you at your address on file. If the mailed copy is returned to Webflow, we’ll reach out to you directly via email and will provide a copy to you through email.
The forms may also be issued directly through Stripe (our payment processor), or directly from your US state of residence. You will receive an electronic copy upon Webflow’s filing.
What to do if you have received Form 1099-K
Note: The following should not be considered tax advice. Webflow recommends contacting a tax professional to determine your exact reporting requirements.
The amounts on Form 1099-K are reported gross, which is an IRS requirement. The amount on your 1099-K is not interpreted by Webflow or the IRS as your earned income. Amounts that were paid to Webflow can be deducted as a business expense against the gross transaction amounts on your 1099-K.
You can use your 1099-K information to determine your earned income with the following example:
- John uses Client billing and his customer is billed $19.99 per month
- Webflow charges $15.24 for monthly hosting and platform fees
- Webflow deducts credit card fees (3%) from John’s payout
$19.99 (Amount John’s client pays per his invoice — this is reported on John’s 1099-K)
- $15.24 (Amount that goes to Webflow for hosting and platform fees)
- $ 0.88 (Amount deducted for credit card processing fees: $19.99 x 2.9% + $0.30)
= $ 3.87 (John’s payout)
Note: The percent charged for credit card processing fees may vary depending on the country you're in, ranging from 2.9 to 3.5% of the total charge.
View your Client billing details
You can access your Client billing invoices from your project’s Billing tab, and will need to review the line items to determine the amounts that were paid to Webflow.
Note: You will not be able to see the amount deducted by Stripe for credit card processing fees.
From the IRS: Understanding Your Form 1099-K
For questions about the amounts on your 1099-K, please contact email@example.com.