Facebook is a popular social media platform used by billions of people around the world to connect with friends, family, brands, businesses, causes and more. As one of the largest and most influential technology companies, Facebook offers various monetization opportunities for content creators, influencers and businesses who use their platform.
One common question that arises is whether Facebook sends a Form 1099 to people who earn money on their platform. The short answer is yes, in some cases Facebook will issue a 1099 tax form if you meet certain IRS reporting requirements for your earnings.
Who Does Facebook Send a 1099 To?
According to their payments terms, Facebook sends a Form 1099-MISC or Form 1099-NEC to users and page owners who:
– Are U.S. based
– Have earned over $600 in a calendar year from monetization products offered by Facebook
This $600 threshold aligns with IRS tax rules that require reporting payments of that size or greater to independent contractors and others who are not classified as employees.
Some examples of monetization channels on Facebook that could lead to 1099 tax forms being issued if exceeding $600 per year include:
– Advertising revenue from ads running on your Facebook page or content
– Creator subscriptions from fans signing up for your “subscribestar” page
– Selling products in your Facebook store associated with your business page
– Receiving tips through Facebook Stars or other tipping features
– Facebook paid online events revenue share
– Facebook Gaming monetization payments (such as ads and stars)
– Partner program earnings from being a Facebook Marketing Expert or Partner
Basically any way you can earn money directly from your use of Facebook could result in a 1099 if you pass the reporting threshold.
Who Does Not Get a 1099 From Facebook?
It’s important to note that not all payouts from Facebook will generate a 1099 tax form.
For example, you would not receive a 1099 from Facebook in these cases:
– Money earned from ads placed on a website outside of Facebook that you own – Facebook is not the direct source of those earnings even though they may facilitate the ads.
– Affiliate marketing commissions from third party programs related to your Facebook content. For example, sharing an affiliate link to Amazon and getting paid commission – that payment comes from Amazon not Facebook.
– Sponsored content brand deals negotiated directly between you and an advertiser. You get paid directly by the brand, not Facebook.
– Crowdfunding contributions like when people donate to a campaign for a cause you champion on your page. Again the money comes from individual donors, not from Facebook itself.
When Does Facebook Send Out 1099s?
For U.S. users who meet the reporting criteria, Facebook will issue 1099 forms reflecting your prior year earnings by January 31st.
So for example, by January 31, 2023 Facebook would mail out 2022 1099s to applicable users who earned over $600 from Facebook monetization products throughout the 2022 calendar year.
It is a good idea to make sure your tax ID and address are up to date in your Facebook account settings if you think you may be receiving a 1099, so that Facebook can properly file the forms with both you and the IRS.
When you receive your 1099, you will need to claim the income on your tax return. The amount shown on your Facebook 1099 will be included in your overall self-employment or business income for the year.
How Can I Access My Facebook 1099?
There are a couple ways you can get a copy of any 1099 tax form issued to you by Facebook:
– Check your account settings under the Monetization section – there is an area to access Tax Information including current or past 1099 forms.
– Watch for the form to be mailed to your address on file in late January. Be sure Facebook has your correct address.
– Contact Facebook support and request an electronic copy of your 1099. You may need to provide additional identity verification.
– Check your designated email inbox for any notifications about your tax forms. Facebook may send reminders by email as well.
– Adjust your notification settings to receive alerts about new tax forms becoming available.
– Download directly from the tax preparation service you use to file if they integrate with Facebook’s tax reporting. For example TurboTax may automatically import 1099 details with your permission.
Having issues getting your 1099 from Facebook? Be sure to follow up early in January or reach out to their support team well ahead of tax time in the U.S.
How Does Facebook Calculate Your Earnings for 1099 Reporting?
Facebook looks at your total earnings from applicable monetization products over the full calendar year (January 1 to December 31) to determine if you meet the $600 threshold for 1099 reporting.
Here’s a brief overview of how common Facebook income sources are calculated for 1099 purposes:
– Advertising Revenue – Your share of payments after fees from ads displayed to your page audience based on the Facebook advertising policies.
– Subscriptions – Your portion of subscription fees paid by fans minus platform fees. May include both one-time and recurring monthly subscription payments.
– Facebook Store – Your net revenue from sale of products through a Facebook store associated with your business page after deducting applicable fees.
– Tips – Total amounts received from Stars or other tipping features.
– Events – Your revenue share from paid online events, minus applicable platform fees and taxes.
– Gaming Earnings – Your portion of gaming monetization like ads and stars revenue, minus fees.
– Partner Program Payments – Your net earnings from participation in programs like Facebook Marketing Expert partners.
Basically all earnings directly paid to you by Facebook throughout the year are totaled to determine if a 1099 is required. Any associated fees or taxes withheld are already accounted for in the net payment amounts.
How to Report Facebook Income on Your Taxes
Any 1099 income received from Facebook must be included when you file your annual tax return. Here are some key points on properly reporting Facebook income:
– Report the full amount from any 1099-NEC on Schedule C line 1 (gross income) if filing as a sole proprietor.
– Include the full 1099-MISC amount on Schedule C line 2 if sole proprietor.
– If structured as an S corporation, include amounts on Form 1120-S. Speak to your accountant.
– The income is subject to ordinary self-employment taxes of 15.3% on the first $147,000 of net earnings in 2023. Schedule SE should be completed.
– Business expenses can be deducted on Schedule C. Track expenses related to earning your Facebook income.
– Estimated quarterly tax payments may be required to avoid underpayment penalties if your income is high enough.
– Talk to a tax professional if you have questions! Correctly reporting 1099 income is vital.
Maximizing Tax Deductions With Facebook 1099 Income
Since 1099 income is taxed as self-employment income, you can take deductions for ordinary and necessary business expenses required to earn that income. Maximizing your eligible tax deductions can help reduce how much you owe on 1099-reported Facebook earnings.
Some types of deductible expenses to factor in when deducting against Facebook income sources like advertising and creator subscriptions on Schedule C include:
– Equipment like cameras, microphones, lighting used to create content.
– Software costs related to content production or running your business.
– Home office deduction calculated based on office space used regularly and exclusively for business.
– A portion of rent, utilities, internet and phone paid for used office space.
– Advertising expenses to boost visibility of your Facebook business pages.
– Travel costs for content production or business trips related to brand partnerships secured through Facebook.
– Paying assistants or freelancers who help manage your Facebook business activities.
– Financial services like legal, bookkeeping, tax prep to support your Facebook business.
– Facebook fees deducted from payments.
– Professional development courses related to building your brand or monetization skills.
Having a system to track expenses and receipts is crucial. Consult a tax pro regarding claiming appropriate deductions.
Strategies to Reduce 1099 Tax Burden
Here are some additional tips owners of larger Facebook businesses can employ to potentially lower their tax bill related to 1099-reported income:
– Incorporate and file taxes as an S corporation or LLC to gain access to additional deductions and tax planning strategies unavailable to sole proprietors.
– Make retirement plan contributions, such as to a Solo 401k, to lower your taxable income. You can contribute both as the employee and employer. Defer taxes now by saving more for later.
– Hire family members and pay them a reasonable wage for services they provide to your business. Their wage becomes a deductible expense lowering your profit subject to self-employment tax.
– Consider using a fiscal year rather than calendar year to shift or defer some tax liability.
– If eligible, take the 20% Qualified Business Income deduction on Schedule C as a sole proprietorship.
– Write off costs of assets over time through depreciation deductions.
– Maximize business travel deductions.
Again, consult a knowledgeable tax professional when planning how to best structure your business and manage tax liabilities related to Facebook 1099 earnings.
Getting a 1099 Correction From Facebook
If you receive a 1099 from Facebook but believe it is inaccurate or incorrect, you can request the information be re-examined or amended. Here is the process to correct a 1099:
– Carefully review your 1099 and look for any apparent errors. Cross check against your own payment records.
– Contact Facebook support as soon as possible and explain the issue – provide any documentation that shows the inaccurate amount.
– Request Facebook amend the 1099 amounts and send you a corrected version.
– Be sure the new 1099 also gets filed with the IRS to correct their records for your tax return.
– If needed, you can file IRS Form 843 to formally claim a refund of taxes overpaid due to 1099 errors.
– You may need to amend your original tax return if already filed and the incorrect 1099 led to additional tax owed.
– Get professional help from a tax accountant or CPA if the 1099 issues are complex.
Having accurate tax reporting from the start is crucial, but mistakes happen. Be diligent about verifying any 1099s you receive reflect the proper income amounts, and follow up for prompt correction of any problems.
Avoiding Scams Related to Facebook 1099s
With tax season underway, it’s important to watch out for potential scams mentioning Facebook 1099 forms. Some signs of scams can include:
– Emails or calls claiming to be from Facebook demanding personal information related to your “unreported 1099 income.” Facebook will not contact you this way about taxes.
– Phishing emails with fake links claiming you need to “update your tax info” on your Facebook account immediately. Go directly to Facebook itself or the IRS website if unsure.
– Requests for payment via gift cards or other unusual methods to clear up an issue related to your 1099 from Facebook. Government entities will never demand this type of payment.
– Threats of immediate arrest or legal action related to “tax evasion” due to Facebook 1099 problems. This is not how tax issues are handled, but scammers want to scare you into quick action.
– Email sender name, subject line or other details look off for a message allegedly from Facebook. Verify the actual source email address.
Trust your gut if something seems suspicious and avoid acting in haste if contacted about any issue related to 1099s from Facebook. Report potential scams to the platform, the IRS, FTC and other authorities.
Key Takeaways
– Facebook issues 1099 tax forms to U.S. users earning over $600 per year from monetization of their content and brand pages.
– 1099 income must be reported on your tax return and taxes paid accordingly. Save records to support income and deductions.
– Watch for your 1099 to arrive by mail or become available in your account by the end of January for prior year earnings.
– Request 1099 corrections from Facebook if your form contains inaccuracies or errors that need to be amended.
– Deduct valid business expenses related to your Facebook earnings to lower taxable income.
– Talk to a tax professional to ensure you fully comply with IRS 1099 reporting requirements.
Understanding if and when you’ll receive a 1099 tax form from Facebook is an important part of staying compliant and optimized with your tax obligations as a content creator or business owner using their platforms.
Frequently Asked Questions
Does Facebook issue 1099-K forms?
No, Facebook does not send 1099-K forms at this time. They issue either 1099-MISC or 1099-NEC to creators and businesses meeting the reporting criteria. The 1099-K is typically used by payment settlement entities for reporting credit card transactions.
Can I get a copy of a 1099 Facebook sent me in a prior year?
Yes, you can access historical 1099 records by contacting Facebook support or checking your account tax information in most cases. Be sure to keep your own copies for records as well, since amendments may be required years later.
Do Facebook’s partners like Marketplace sellers get 1099s also?
Third-party partners on Facebook may also receive 1099s depending on their monetization structure. For example, sellers on Marketplace receiving over $600 a year direct from Facebook based on their seller fees and payouts could get a 1099. Partners should check program terms.
Does boosted content count toward 1099 income?
Yes, any money you pay Facebook to boost the reach of your content through paid promotions would count as an expense reducing your ultimate income subject to 1099 reporting. The net revenue after expenses like this is reported.
Can I claim business expenses even without getting a 1099?
Yes, you can still deduct eligible business expenses related to your Facebook content even if you don’t earn enough to trigger receiving a 1099 tax form. Keep good expense records.
Conclusion
Receiving a 1099 from Facebook can seem intimidating, but simply represents taxable income you must properly report. Save documentation, track deductible expenses, work with tax professionals, and take advantage of available deductions to manage your obligations. Handled correctly, 1099 income can be a beneficial revenue stream for creators and businesses building their brand on Facebook.