The Form 1099-K reports the gross payment of transactions received from third-party payment networks that total over $5,000. If you use multiple platforms, you will receive a 1099-K for each one that meets the threshold. Some examples of the platforms that will be reporting the transactions on a Form 1099-K are; Paypal, CashApp, Amazon, Venmo, Etsy, and Zelle. If you do meet this threshold, you may find a Form 1099-K(s) in your mailbox by January 31st of the upcoming tax season. If you do not receive the Form 1099-K, you may be able to download it directly from the network's site.
Please note: according to the IRS, "The minimum reporting thresholds apply only to payments settled through a third-party network; there is no threshold for payment card transactions."
I have received my Form 1099-K, now what?
Now that you have received your Form 1099-K you will want to check that the income being reported on the Form 1099-K matches your business records. Once you have verified the information reported is correct, you will need to report the amounts listed on your Form 1099-K on your taxes.
Do I have to pay taxes on the income listed on the 1099-K?
Whether you have to pay taxes on the income from the Form 1099-K will depend on the situation. If the Form 1099-K is from income you received due to something you have sold or a service you provided related to your business it is likely you will owe taxes if you have made a profit. However, if the income is money that was given as a gift from friends and family or due to personal reimbursements, you will not owe taxes.
I need to correct the information reported on my 1099-K
Your business records should reflect your business income which would include the amounts that are reported on your Form 1099-K. If you receive a Form 1099-K that needs corrections, such as an incorrect amount reported for gross income, or if the form does not belong to you, please see our article on the subject.