Form 1099-K

What is Form 1099-K?

Form 1099-K reports payments processed through payment cards and third-party payment networks like PayPal, Stripe, or Square. The payment processor, not you, issues this form to report gross transaction amounts. You receive 1099-K to help reconcile income reported on your tax return with amounts the IRS already knows about from payment processors.

Reporting thresholds and changes

Historically, 1099-K required over $20,000 and 200 transactions annually. New rules are lowering this threshold significantly, though implementation has been delayed. Regardless of whether you receive a 1099-K, all income is taxable. The form is informational, helping the IRS match reported income to actual payments received.

Reconciling 1099-K with your books

The 1099-K shows gross amounts including refunds, fees, and chargebacks that reduce your actual revenue. Your books should show net amounts. Reconcile the gross 1099-K figure to your deposited amounts by accounting for processor fees, refunds, and chargebacks. Document this reconciliation in case of IRS inquiry about the difference.