If you were an independent contractor during the tax year and received $20,000 or more in payments via third-party apps like Cash App, PayPal, or Venmo, you will receive a 1099-K. Any income reported to you on a 1099-K must accounted for on your tax return.
How do I report the 1099-K?
If you receive a 1099-K, you will want to report the payments you received from contracting on a Schedule C so your income is taxed correctly. To report a Schedule C, please follow the steps below.
- Profit or Loss from Business
Remember to only report the payments received from the independent contractor work. For example, if your 1099-K reports
What if some of the payments listed on my 1099-K aren't from contractor work?
Money you received from friends and family as a gift or reimbursement of a personal expense should not be reported on a Form 1099-K. If you have payments that should not be taxed reported on your 1099-K, first you will want to contact the issuer and ask for it to be corrected. If you cannot have the 1099-K corrected, follow the steps below to report any nontaxable payments reported on your 1099-K.
- Federal Section
- Adjustments to Income
- Other Adjustments
- Other Adjustments Not Listed Above
- Enter the Description as 1099-K received in error
- Enter the amount that should not be considered income on the 1099-K