Form 1099-K: What It Is and What to Do

Form 1099-K is a report of payments you received for goods or services during the year. Companies that process these payments send the form to the IRS. They also send you a copy, usually by January 31. IRS: Understanding your Form 1099-K

Who sends the form?

You may get a Form 1099-K from one of these sources:

Your card processor. If customers pay you by credit, debit, or gift card, you get a form no matter how many payments you received or how large they were.
A payment app. Apps that move money between buyers and sellers send a form only when your payments for goods or services are more than $20,000 and there are more than 200 transactions.
An online marketplace. Auction sites, craft marketplaces, ride-hailing apps, and freelance sites follow the same $20,000 and 200-transaction rule.

A payment app may send a form for smaller amounts. Your state may also have a lower limit. If you use more than one platform, you may get more than one form.

The form does not decide what you owe

The reporting limit tells companies when to send a form. It does not decide whether a payment is taxable. The IRS says all income is taxable unless the law says otherwise, even if you do not get a Form 1099-K. Income includes cash, property, and services, not only the amounts shown on forms.

Step 1: Check the form

Your taxpayer number. The form shows the last four digits of your Social Security number, ITIN, ATIN, or EIN. Check that they match yours.
Box 1a, the gross amount. This is the total before fees, refunds, credits, shipping, discounts, and cash equivalents. Those items are not income. You can subtract them when you report your income.

Step 2: Check your records

Compare the form with your own records, such as app reports, receipts, and bank statements. A payment on the form is not always taxable. Keep records for each payment you report and each expense you subtract.

Step 3: Sort each payment

Gifts and personal payments are not income. Money from family or friends for gifts, shared rides or meals, or a roommate's share of rent is not taxable. If this money appears on a form, contact the issuer. When you can, mark these payments as personal in the app.

Business income. Payments for goods you sell or services you provide are income. Freelancers, gig workers, and people who sell items as a hobby generally report this income on Schedule C (Form 1040).

Personal items sold at a loss. If you sold a personal item, such as furniture or a car, for less than you paid, the loss cannot be deducted. You can report the payment at the top of Schedule 1 (Form 1040). This keeps you from paying tax on it. You can also report the sale on Form 8949 and Schedule D.

Personal items sold at a gain. A profit on a personal item is taxable. Report the gain on Form 8949 and Schedule D (Form 1040). If you sold some items at a gain and others at a loss, report the gains and losses separately.

Step 4: Fix problems

You got a form you should not have. For example, it shows personal payments, someone else's payments, or a duplicate. Contact the issuer and ask for a corrected form that shows zero. The issuer's name and contact information are in the "Filer" box in the upper left corner. Keep the original form and your messages.
The taxpayer number or gross amount is wrong. Ask the issuer for a corrected form. The IRS says it cannot correct a Form 1099-K, so do not contact the IRS about this.
You cannot get a corrected form. Do not wait. File your return anyway. If the gross amount is wrong, the IRS says to enter the amount from the incorrect form in the entry space at the top of Schedule 1 (Form 1040).

What to do next

Gather every Form 1099-K you received, from each app, marketplace, and card processor.
Compare each gross amount with your records.
Sort each payment: business income, personal sale, or personal payment.
Report business income on Schedule C. Report personal sales as described above.
Ask for a corrected form if anything is wrong, then file on time.

Remember that you must report all income, even if you get no Form 1099-K. That includes cash, property, and digital assets.

This page is general information, not advice for your return. Your facts decide the answer. If you want to learn more, see how it works.

Sources: IRS: Understanding your Form 1099-K (https://www.irs.gov/businesses/understanding-your-form-1099-k); IRS: What to do with Form 1099-K (https://www.irs.gov/businesses/what-to-do-with-form-1099-k); IRS: Form 1099-K FAQs, General information (https://www.irs.gov/newsroom/form-1099-k-faqs-general-information). The $20,000 and more-than-200-transactions reporting limit for payment apps and marketplaces is stated in these IRS pages. This is general information, not advice about your specific return.

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