What Is a 1099-K? Who Gets One and How It Works

Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
What is an IRS Form 1099-K?
- Federal: $79 to $139. Free version available for Simple Form 1040 returns only.
- State: $0 to $69 per state.
- Expert help or full service filing is available with an upgrade to Live packages for a fee.
What is a 1099-K used for?
Who qualifies for a 1099-K?
Do I have to report 1099-K income on my taxes?
- You're required to report business income on your taxes. If you’re a sole proprietor, for example, you’ll likely need to file a Schedule C with your tax return to calculate and report your business income. Your 1099-Ks can help you understand how much you received from clients through Venmo, PayPal or similar payment methods.
- Be sure you don’t double-report your income. Let’s say you did $23,000 worth of freelance work for a client during the year. You’ll likely need to report that income as business income on your tax return, but you’ll have two documents reflecting the income. At the end of the year, the client is probably going to send you a 1099-NEC showing that it paid you $23,000. But if the client sent you that money using PayPal, Venmo or a similar platform, you might also get a 1099-K for the same $23,000 from the payment network. For this reason, you’ll need to keep good accounting records to make sure you don’t over- or underreport your business income.
- Receiving a 1099-K doesn’t necessarily mean you owe taxes on that money. First, not all of the transactions on your 1099-K may be business-related. (The amount could include your roommate reimbursing you for groceries, for example.) Second, you might have self-employment tax deductions that could offset some of your business income.
- Federal: $79 to $139. Free version available for Simple Form 1040 returns only.
- State: $0 to $69 per state.
- Expert help or full service filing is available with an upgrade to Live packages for a fee.