What is a 1099k?
Introduction
Form 1099-K, Payment Card and Third Party Network Transactions, is an IRS information return used to report payment transactions received through payment card processors and third-party settlement organizations (TPSOs). This form assists in ensuring that income from goods and services is accurately reported for tax purposes.
Who Receives a 1099-K?
For the 2025 tax year, you will receive a Form 1099-K if:
Payment Card Transactions: You received payments from credit, debit, or stored-value cards, regardless of the amount or number of transactions.
Third-Party Network Transactions: You received payments for goods or services through a TPSO (e.g., payment apps, online marketplaces) exceeding $2,500 in total gross payments during the calendar year.
Note: The threshold for TPSO reporting has been gradually reduced in recent years. For the 2024 tax year, the threshold was $5,000, and it is set to decrease to $600 for the 2026 tax year.
Why Did I Receive a 1099-K?
If you received a Form 1099-K, it indicates that a payment settlement entity processed reportable payment transactions on your behalf that met the reporting thresholds. This form reports the gross amount of all reportable payment transactions, which includes:
Total Payment Volume: The sum of all payments received for goods and services before any deductions, such as fees, refunds, or adjustments.
Receiving a Form 1099-K does not necessarily mean that the entire amount is taxable income. You should maintain accurate records to determine the taxable portion, accounting for deductions like business expenses, refunds, and other allowable adjustments.
What Should I Do with My 1099-K?
Upon receiving your Form 1099-K:
Review the Form: Ensure all information is accurate, including your taxpayer information and the gross payment amounts.
Reconcile with Your Records: Compare the amounts reported with your own records to confirm consistency.
Report Income Accurately: Use the information from Form 1099-K, along with your records, to report your income on your tax return. Remember, all income is taxable unless specifically excluded by law, regardless of whether you receive a Form 1099-K.
What does a 1099-K look like?
Additional Resources
For more detailed information, refer to the IRS resources:
This page is for informational purposes only and should not be considered tax advice. Consult a tax professional for advice related to your specific circumstances.
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