1099-K

Sep 19, 2026

Upload by Hazel

The 1099-K form is used to report payment processing activity to both taxpayers and the IRS, affecting not only businesses but also individuals under updated IRS thresholds. The document explains prior rules (credit card processing over $20,000) versus current rules (over $600, across common platforms). It clarifies that receiving a 1099-K does not automatically mean the money is taxable, but the IRS cross-checks returns and unreported amounts can trigger notices. Practical guidance covers where to find the form and the need to enter it correctly on tax returns.

LanguageEnglish

CategoryInvoices

FormatPDF

Pages2

Reading Time1 min

AccessFree to download

1099-K form overview

How rules changed from $20,000 to $600

Common platforms that may issue 1099-K

When 1099-K does not mean taxable income

What happens if you don’t report it

How to locate and handle the form

Hi, it's Siobhan here and this is a brief video about the 1099-K form. Now I know most of you have probably not even heard of this form, but many more of you will by the time we hit February. So this form, the 1099-K, I’ll explain what it is, how it's been used in the past, how the rules have changed (the IRS has changed the rules of the game with this form), why this is going to affect a bunch more of you, and what to do about it. In the past, the 1099-K form was issued to businesses by credit card processing companies when they process more than $20,000 in payments. So for example, if you have a business and you use Stripe or Square or PayPal for running credit cards and receiving payments in your business, if you have more than $20,000 that runs through your business through that system, that system will send you a 1099-K form. They go out at the end of January and so people have them end of January, early February. So alot of business owners are familiar with this form as issued by credit card processing companies. However, the IRS changed the rules and the way they changed the rules is they said if these companies process more than $600, they need to issue a 1099-K and they need to do that whether it's going to a business or an individual. So this is why it's going to affect so many more people. The dollar threshold has come way down from $20,000 to $600 and it's going out to businesses and individuals. What this means is if you decided this is the year you are going to get your basement cleared out and sell all that stuff on eBay, if you sold more than $600 worth of stuff on eBay, you will get a 1099-K form from eBay. If you have a craft hobby and you make really cool stuff and you're selling it on Etsy on the side for fun, cover some of your costs of yarn or whatever your supplies are. If you sold more than $600 worth through Etsy, you're going to get a 1099-K form from Etsy. Maybe you're heavy Venmo user. I see this more and more. If you have a lot of funds getting transferred through Venmo, maybe you go out alot with friends and you share expenses one person pays and everybody else venmos them their portion. Or you had a big garage sale this summer and a lot of people paid you via Venmo. If you received more than $600 through Venmo, you'll get a 1099-K form. So here's the deal. You're going to get a 1099-K form whether or not this money coming to you is taxable. If you had a garage sale, that income is not taxable income. If you go out with friends and you pay the bill for dinner and drinks and everybody venmos you a portion of it, that's not taxable income. If you're selling stuff out of your basement on eBay, that's usually not taxable income. If you are selling stuff on Etsy, usually you're not generating taxable income, although it might be reportable on your tax return, it's usually not taxable. So here's the thing, all of these companies are going to be sending out all these 1099-K forms and some of it is not taxable income, but the IRS will assume that it is. So the reason the IRS changed the rules is they want to catch more people who are earning money and not reporting it, right? That's their job. Sadly, I don't think this is a great strategy for it because it's going to make more headaches than it is valuable to them. But that's a whole other discussion. We won’t go there. When you receive a 1099-K form, the IRS receives it too and they do a crosscheck. When you file your tax return, they look on your tax return and they look for that form as taxable income. So if you do not report this income on your tax return, what's going to happen? You're going to get a nastygram from the IRS. You're going to get a notice that says, Hey, you didn't report all your income and actually we think you owe a bunch more tax, right? We hate those notices. It freaks people out. We have a lot of experience dealing with these notices, and if you haven't yet watched the video above about our worry free client care packa

FAQs

Does receiving a 1099-K mean the income is automatically taxable?

No. Some income—such as proceeds from a garage sale—may not be taxable. However, it still needs to be addressed on the tax return so it is treated correctly.

Sep 19, 2026

Upload by Hazel