If you're an independent contractor and receive payments through third-party apps such as Cash App, PayPal, or Venmo, you may receive Form 1099-K, Payment Card and Third Party Network Transactions. For tax year 2026, third-party settlement organizations generally must issue a Form 1099-K when payments for goods or services exceed $20,000 and more than 200 transactions during the year. However, some payment providers may send a Form 1099-K even if you don't meet those thresholds. No matter whether you receive a form, all taxable self-employment income must be reported on your tax return.
How do I report Form 1099-K for independent contractor income?
If the payments reported on your Form 1099-K are from independent contractor or self-employment work, report that income on Schedule C (Profit or Loss From Business). Reporting the income on Schedule C allows your earnings and related business expenses to be taxed correctly.
To enter a Schedule C in the software:
- Go to Federal.
- Select Income (Select my forms).
- Choose Profit or Loss From Business (Schedule C).
Only include the portion of the Form 1099-K that relates to your independent contractor or business activities.
What if my Form 1099-K includes personal payments?
Form 1099-K should not include personal payments, such as:
- Gifts from friends or family
- Shared-expense reimbursements
- Personal repayments
If your Form 1099-K includes amounts that are not taxable, contact the payment provider and request a corrected form. If you can't obtain a correction before filing, you can report the nontaxable amount separately in the software so it isn't taxed as income.
To enter a Form 1099-K for non-taxable payments:
- Go to Federal.
- Select Income (Select my forms).
- Choose 1099-K.
Follow the prompts to identify any payments that were not related to goods, services, or self-employment income.
Important reminder
Receiving a Form 1099-K doesn't automatically mean the entire amount is taxable. Review the form carefully and keep records that show which payments were for business activities and which were personal. Good documentation can help if the IRS ever asks questions about the amounts reported on your return.