If you received a Form 1099-K, how you report it on your tax return depends on why you received the payments. Form 1099-K reports payment transactions, but it does not automatically mean the entire amount is taxable income.
It's important to compare the amounts on Form 1099-K with your own records and report the income correctly.
Why Did I Receive a Form 1099-K?
According to the IRS, Form 1099-K reports payments you received through:
- Credit, debit, or stored-value cards (such as gift cards)
- Payment apps
- Online marketplaces
- Other third-party payment networks
Payment processors send Form 1099-K to both you and the IRS when reporting requirements are met. Keep in mind that receiving a Form 1099-K does not determine whether income is taxable. You must report taxable income even if you do not receive a form, and some amounts reported on a Form 1099-K may not be taxable.
Are Gifts or Personal Reimbursements Taxable?
Generally, personal payments should not be reported on Form 1099-K. Examples include:
- Gifts from friends or family
- Reimbursements for shared meals
- Repayment of personal expenses
- A roommate's share of rent or utilities
These types of payments are typically not taxable income.
Reporting Form 1099-K Business Income
If your Form 1099-K reports payments you received from self-employment, freelance work, a side business, or other business activities, the income is generally reported on Schedule C (Profit or Loss From Business).
To enter this income in the program:
- Go to Federal
- Select Income (Select my forms)
- Choose Profit or Loss from a Business (Schedule C)
- Select Income
- Enter the amount under Gross Receipts or Sales (Including Income Reported on Form 1099-K)
Be sure your Schedule C income includes all business income, not just the amount shown on Form 1099-K.
What If My Form 1099-K Is Incorrect?
If Form 1099-K includes personal payments that should not have been reported, contact the issuer and request a corrected form whenever possible.
If you cannot obtain a corrected Form 1099-K, you may reduce the amount reported on Schedule C by the non-taxable personal payments and separately identify the amount reported in error within the program.
To enter information from an incorrect Form 1099-K:
- Go to Federal
- Select Income (Select my forms)
- Choose 1099-K
Keep detailed records showing which payments were personal and why they are not taxable. If the IRS requests additional information, those records can help support your return.
Important Reminder
The Form 1099-K reporting threshold only determines when a payment platform must issue the form. It does not determine whether income is taxable. If payments were for goods sold, services provided, gig work, or business activities, the income may still need to be reported even if you did not receive a Form 1099-K.
Related Information
For additional guidance about Form 1099-K and IRS reporting requirements, refer to the IRS instructions and your payment processor's records to ensure all income is reported accurately.