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Form 1099-K Guide 2025 – Reporting Payments from Apps & Marketplaces
Form 1099-K reports certain payment transactions you received during the year, including payments from credit cards, debit cards, stored value cards, payment apps, or online marketplaces. It’s an important IRS form that helps ensure your taxable income is correctly reported.
Who Gets Form 1099-K?
- You had over 200 transactions with payment cards (credit, debit, or gift cards).
- You received more than $20,000 through a payment app or online marketplace (such as PayPal, Venmo, eBay, or Etsy).
- This can include payments for goods, services, property rentals, car sharing, ride-hailing, or freelance work.
Note: Gifts or reimbursements from family and friends should not be reported on Form 1099-K.
What Should Not Be Reported
Personal reimbursements and gifts are not taxable income and should not appear on Form 1099-K. Examples include:
- Splitting the cost of a meal or ride with friends
- Receiving birthday or holiday gifts
- Roommates reimbursing you for shared household bills
What to Do With Form 1099-K
- Check the information carefully. Verify the gross payment amount reported is accurate.
- Understand gross payments. Box 1a reports gross payments before fees, refunds, or discounts. These adjustments can be deducted separately.
- Compare with your records. Use app reports, merchant statements, or receipts to reconcile the amounts.
- Provide it to your tax preparer. Form 1099-K should be included with your other tax documents when filing.
If You Sold Personal Items
If you sold a personal item through a payment app or marketplace:
- Sold at a loss: The loss is not deductible.
- Sold at a gain: The gain is taxable income.
If You Sell Goods, Rent Property, or Provide Services
Form 1099-K often applies to gig workers, freelancers, independent contractors, and hobby sellers. You must report:
- Gross income from goods sold, property rented, or services provided
- Income reported on 1099-K, 1099-NEC, or 1099-MISC
- Any additional income received via cash or check
If You Get a Form 1099-K in Error
You may receive a Form 1099-K in error if it includes personal reimbursements, duplicate transactions, or payments not belonging to you. In these cases:
- Contact the issuer immediately
- Keep a copy of the form and all correspondence
- Request a corrected form if necessary
Why Accurate Reporting Matters
Form 1099-K helps the IRS ensure all taxable income is reported. Proper reconciliation with your own records is critical. Misreporting can lead to tax notices or penalties, while good recordkeeping ensures you claim all eligible deductions like fees, refunds, and expenses.
Download the 2025 Form 1099-K Guide or contact us for help with gig income, side businesses, or online marketplace transactions.