Whether you own a business, are self-employed, work in the gig economy or are selling personal items, you may receive Form 1099-K.
NOTE: Since publication of this article, there have been several updates to the 1099-K law. The "One Big Beautiful Bill Act" from July 2025 permanently reinstates the original, higher reporting threshold of over $20,000 in gross payments and more than 200 transactions in a calendar year.
This law change reverses the previously planned phased-in thresholds that would have gone as low as $600. (Updated 1/9/25)
Form 1099-K reports the gross amount of payments and transactions from online platforms, apps or payment card processors, such as Venmo, PayPal, Square, and Stripe.
If you sold goods or provided services (not as an employee) and used one or more third-party processing organizations to receive payment, you may receive a Form 1099-K. Starting for tax year 2023, third-party payment networks are required to file Form 1099-K with the IRS and provide a copy to you when the gross payment amount is more than $600. If you used more than one processor, you may receive a 1099-K from each of them.
Note that receiving (or not receiving) a 1099-K does not ultimately change your tax liability. If you own a business or are self-employed, including those who work in the gig economy, it is important that your business books and records reflect your business income, including any amounts that may be reported on Form 1099-K. This income is generally referred to as "gross receipts" on income tax returns and is required to be reported. Be sure to keep your own records of income earned throughout the year, so you can confirm any 1099-K received is correct -- or report your income properly if no 1099-K is received. Our clients will be asked for the total of their income from goods sold or services (other than as an employee) in the 'Self Employment' section of our online organizer when submitting information at tax time.
What if I receive a 1099-K in error?
If you receive a 1099-K that:
- Reports payments that were gifts or reimbursements from family or friends, or
- Doesn't belong to you or is a duplicate,
This 1099-K has likely been issued in error. In this case, the IRS recommends you do the following:
- Contact the issuer immediately – see FILER on the top left corner of Form 1099-K
- Keep a copy of the original form and all correspondence with the issuer for your records
If your 1099-K was issued in error and you cannot get a corrected form, explain the situation to your tax professional to be certain everything is reported clearly and accurately on your tax returns.
For our clients who may receive a 1099-K issued for income not addressed in this blog post (for instance, the sale of a personal item), be sure to upload a copy of the 1099-K to your portal account and tell us what that reported amount was for in the space alotted in your online organizer at tax time.
Additional information is available at https://www.irs.gov/businesses/understanding-your-form-1099-k
For additional concerns or questions regarding form 1099-K, a consultation can be scheduled with our Team by following this link - https://calendly.com/karasseipeltax