Selling online through platforms like PayPal, Etsy, or Uber? Then you need to understand Form 1099-K. This form reports your gross payment volume received through third-party payment networks. Think of it as a summary of your online sales activity.
Why should you care? The IRS uses Form 1099-K to track income and ensure taxes are paid. If you meet certain thresholds – historically $20,000 in gross payments and 200 transactions – you'll receive one. Note that the $20,000 threshold is under review and may be lower in future years.
What should you do? First, reconcile the 1099-K amount with your own records. Are there discrepancies? Contact the payment platform immediately. Second, report this income on your tax return. Don't forget to deduct eligible business expenses! Understanding Form 1099-K can save you from tax headaches later. Stay informed and keep accurate records!
