By law, restaurant partners must declare and pay taxes on income earned from Ritual sales regardless of the amount. A 1099-K is only issued should the relevant thresholds noted below be met.
How is the total on my 1099-K calculated?
If you are located in the US and gross payments exceed $20,000 with over 200 transactions, Ritual is required to report your total gross payments from Ritual orders on the 1099-K form without subtracting expenses, such as:
- sales tax collected by you
Please note that the 1099-K will report aggregate gross payments processed for all restaurants using the same Tax Identification Number (TIN).
Restaurant Partners in Massachusetts:
Massachusetts uses a threshold of $600 with no transaction threshold. If your tax reporting information is associated with Massachusetts, you will receive a 1099-K if your gross payments equal or exceed $600 irrespective of the number of transactions. The 1099-K will be filed with the Massachusetts Department of Revenue. If your gross payments exceed $20,000, this will also be sent to the IRS.
What does gross sales income mean?
According to the IRS, gross amount means, "The total dollar amount of total reportable payment transactions for each participating payee without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts or any other amounts."
How to calculate your gross income
To calculate the totals on the 1099-K form issued for your Ritual sales, you can go to:
2. Sales Report tab
3. Sales Summary
4. Add up the following: Sales, Taxes, Tips