Payment apps and online marketplaces must file Form 1099-K if your payments for goods or services in the year exceed $20,000 and you had more than 200 transactions, the threshold reinstated by the One Big Beautiful Bill Act, and they may send one for lower amounts. When they issue one, they must send you a copy by January 31. A ProfitDrawer bookkeeping spreadsheet records all of your sales income, whether or not a form arrives.
Points to know:
- Card payments are different. Payment card transactions processed for you have no minimum, so card processors can issue a Form 1099-K for any amount.
- You may get one below the threshold. The IRS notes you can still receive a Form 1099-K even if your payments were under $20,000 or 200 transactions.
- The form does not decide what is taxable. Whether or not you receive a Form 1099-K, you must report your income on your tax return.
- States can be lower. Some states set their own, lower reporting threshold.
- Personal items: if you get a form for selling personal things or for money from friends and family, the IRS page on understanding your Form 1099-K explains what to do. A personal item sold at a gain is still taxable income.
Keep your own record of gross sales, fees and refunds through the year, then compare it with any Form 1099-K you receive so you can explain any difference. General information, not tax advice.
Source: IRS: Understanding your Form 1099-K · Updated
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General information, not tax, legal or financial advice. Check the rules for your state and your situation.