The information in this article is up to date through tax year 2025 (taxes filed in 2026).
Have you received Form 1099-K and are wondering what that means for your taxes? As third-party payment platforms become more popular and convenient among businesses and consumers, more taxpayers will begin reporting this tax form. Keep reading for the latest IRS requirements for reporting payments processed by third-party settlement platforms.
What is Form 1099-K, and why am I getting one?
IRS Form 1099-K Payment Card and Third-Party Network Transactions is an informational tax form that tells the IRS how much income a person received in electronic or credit/debit card payments for the sale of goods and services.
In 2024, the IRS required third-party payment providers to issue Form 1099-K for transactions totaling more than $5,000.
For tax year 2025 going forward, third-party payment providers will only be required to issue a 1099-K if you:
- Received more than $20,000 in gross payments and
- Had more than 200 transactions in a calendar year
Do I have to report my Form 1099-K?
It’s important to report the information on your 1099-K correctly so you don’t end up paying too much or too little in taxes. Accurate reporting will help you avoid a surprise tax bill and decrease your chances of being audited.
I get money from friends and family in PayPal. Are these transactions taxable?
The IRS is clear that “reporting by third-party settlement organizations applies only for transactions for the provision of goods or services settled through a third-party payment network.”
In other words, personal transactions (with friends and family, for example) are not taxable. It’s a good idea to review the 1099-Ks you receive for accuracy. If you believe a payment platform issued a 1099-K to you by mistake, you should contact the third-party payment provider to correct the form as soon as possible.
Can the IRS see my Cash App/Venmo/PayPal account?
No, the IRS can’t directly see the activity in your payment apps. At tax time, the third-party processing company sends both you and the IRS a copy of your 1099-K. The info on the 1099-K lets them know about the transactions on your account during the tax year. It’s up to you to report and confirm these earnings on your tax return.
How do I report my 1099-K?
How you report Form 1099-K will depend on the circumstances you received the form. Below are scenarios that may result in a 1099-K and how to report it:
1099-K for business income
It’s very common for self-employed taxpayers to conveniently collect non-cash payments from customers using a third-party payment platform. If you are self-employed, your 1099-K payments get reported on Schedule C. TaxSlayer Self-Employed is designed to make filing as easy as possible for your unique tax situation.
1099-K for hobby income
You may not have a business, but let’s say you have a hobby activity where you received more than $20,000 in tax year 2025 using a third-party payment provider. Hobby income on Form 1099-K should be reported as “Other Income” on Schedule 1, Additional Income and Adjustments to Income.
1099-K for rental income
If you own rental properties, you may collect monthly payments from tenants using an app like CashApp or Venmo. These transactions are taxable and will result in payment providers sending you a Form 1099-K. Depending on your type of ownership of the property, you should either report this income on a Schedule C or a Schedule E.
If, for instance, you have a roommate who sends you their portion of the rent each month using a third-party platform, these transactions may result in you receiving a 1099-K. Since you are not the property owner, this is not considered a part of your income. However, you must still account for receiving the 1099-K on your tax return.
1099-K for the sale of a personal item
A personal item is considered something you own for personal use, like a car, refrigerator, furniture, jewelry, silverware, etc. Let’s say you sell a personal item through a platform like Facebook Marketplace and make money on the sale of the item. The money you made would be considered a capital gain, and you should report it on Schedule D of your tax return. You can calculate the capital gain by subtracting your original cost from the sale price reported on your 1099-K.
If your item was sold at a loss (less than you paid for it), this would obviously not be considered a capital gain. However, you must still account for the 1099-K on your tax return. You can offset the income so that it does not add to your overall taxable income.
What if I didn’t get a 1099-K?
If you think you should have received a 1099-K, but it hasn’t arrived by January 31st, contacting the third-party processor you use is a good idea. You might be able to access your forms from within the account or app.
Note: Keeping good, independent records of your business income and expenses is always recommended. That way, if the company did not prepare a 1099-K for you, you can still report your income accurately.
What if my 1099-K is incorrect?
If you suspect that your 1099-K is reporting a personal transaction that should not be considered taxable, the first thing you should do is contact the issuer of the form to get it corrected. Notifying the issuer will allow the issuer to provide you with an updated form and, more importantly, send the corrected form to the IRS.
If you have reached out to the issuer but cannot get a corrected form, you should still report 1099-K payments on your return. Again, the IRS will have a copy of the form in their records, and if the 1099-K is missing from your return, it could cause a rejection.
For more answers, refer to the IRS guide on Form 1099-K.
