What should I do about a surprise Form 1099-K?
A Form 1099-K reports payments you got for goods or services through cards, payment apps or online marketplaces. Apps must send one if you got over $20,000 in more than 200 payments, but may send one for less.
Card processors send a 1099-K no matter how many payments you got.
You must report all income from selling goods or services, with or without a 1099-K. That includes personal items sold at a gain.
Money from friends and family as gifts or to split a bill is not taxable and should not be on a 1099-K.
Key facts
- Every 1099-K you got (you may get more than one)
- Which payments were personal, not business
- Your costs to figure profit
- Whether you made estimated payments
- Any CP2000 about the income
Options that may help
Use the 1099-K with your records to figure your taxable income.
If you got one you shouldn't have, follow the IRS steps.
If you owe and can't pay, set up a plan.
Results depend on your situation. Not every case qualifies.
Common questions
When should a 1099-K arrive?
Companies must send your copy by January 31.
Do I owe self employment tax on side income?
If it is a business, the self employment tax rate is 15.3% on net earnings.
Source: IRS: Self employment tax
Sources
General information, not tax or legal advice. You can contact the IRS yourself for free at irs.gov.