January 19 2023

What’s a 1099-K and what is the income threshold?

Table of Contents

What’s a 1099-K and what is the income threshold?

The 1099-K form reports income received through third-party digital payment methods like:

PayPal
Square
Etsy or eBay
ePay
Debit and credit card companies
Other payment platforms

If you received a 1099-K for your digital payments, you would need to report this income on your tax return.

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You do not have to report nonbusiness income like exchanges between friends or family, as they are not taxable.

What is the income threshold?

The IRS has delayed the new $600 income threshold, meaning forms for total transactions under $20,000 this year probably won’t be issued.

However, you still must report all your income.

What is included in a 1099-K?

Like many other tax forms, you will see your personal information, who issued the 1099-K, and the state.

The most important part for you is box 1a. It lists the gross amount of payments you received last year. This is what you will enter to report your 1099-K income.

It also lists how many transactions you had and breaks down the amounts per month. You can just keep that for your records—you will not need to enter that.