Form 1099-K: what it shows and how to report it

What does Form 1099-K report?

Form 1099-K reports payments you received for goods or services through payment cards or third-party payment networks. It is issued by the company that settled the payments: a card processor, or a platform such as a payment app or online marketplace. Setting up one common processor is covered in how to set up Stripe for a US LLC. A copy goes to the IRS, so the IRS knows your gross receipts through that channel.

When do you get one?

• Payment platforms and marketplaces issue one when your payments for goods and services are over $20,000 and there are over 200 transactions in the calendar year. A 2025 law restored this long-standing threshold, replacing a planned drop to $600. It is not adjusted for inflation.
• Card processors report payment card transactions regardless of the amount.
• Some states require platforms to issue forms at lower amounts, so you may receive a state-level 1099-K below the federal threshold.

Whether or not you receive one, business income is taxable. The form reports it, it does not create it. See reporting income without a 1099.

What is on the form?

• Box 1a: the gross amount of payment transactions for the year.
• Box 1b: card-not-present transactions, meaning online or phone payments.
• Box 3: the number of payment transactions.
• Box 4: any federal backup withholding.
• Boxes 5a to 5l: the gross amount for each month.
• Boxes 6 to 8: state information.

Why does it not match my income?

Box 1a is gross. It includes amounts later refunded, the platform's own fees, shipping charged to buyers and, for marketplace sellers, sales tax in some cases. Your taxable profit is gross sales less refunds, fees, cost of goods sold and other expenses. For marketplace sellers, see Amazon FBA taxes. Platform-specific guides: eBay seller taxes, Etsy seller taxes and Upwork and Fiverr taxes.

How do you report it?

1. Reconcile it with your records

   Match box 1a to the platform's annual or monthly reports and list the differences: refunds, fees, shipping, personal payments.

2. Report gross receipts on your business return

   On Schedule C for sole proprietors and single-member LLCs, or the business's own return. Reporting receipts that at least include the 1099-K amount, then deducting refunds, fees and costs as expenses, keeps your return consistent with what the IRS received.

3. Keep the reconciliation

   If the IRS sends a notice comparing your return with the 1099-K, the reconciliation is your answer. See IRS notice CP2000.

If a 1099-K includes personal items you sold for less than you paid, such as used furniture, that is not business income. The Form 1040 instructions explain how to report and offset such amounts.

Setting up a PayPal Business account in the LLC's name keeps the 1099-K under the right taxpayer. See PayPal Business for a US LLC.

What if the form is wrong?

If it includes payments that were not yours, personal gifts or reimbursements from friends and family, or duplicates, ask the issuer for a corrected Form 1099-K. If you cannot get one, report correctly and keep evidence of the difference.

Can the same money appear on a 1099-NEC too?

It should not. Payers are told not to issue Form 1099-NEC for payments they make by card or through a payment network, because those are reported on Form 1099-K. If a client sends both for the same payment, report the income once and keep records showing the overlap. See Form 1099-NEC.

This guide is general information. It is not tax or legal advice for your situation.