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Know the Facts About Form 1099-K

By March 6, 2024No Comments

Will people will get a Form 1099-K from friends and family sending them personal payments?

Payments from friends and family should generally not be reported on a Form 1099-K. Form 1099-K reports payments for goods or services and should not report personal payments like rent, dinner, travel and other gifts or reimbursements gifts, no matter the amount. Generally, in payment apps, the default is personal payments unless the sender designates that they’re purchasing goods or services, or it is designated a business account.

If I didn’t receive a Form 1099-K, do I have to report income?

According to federal law, all income is taxable unless it is specifically excluded by tax law. You should report any profits from selling goods or services, regardless of whether you receive a Form 1099-K.

Will I get a Form 1099-K if I sold goods or services under the $20,000 and 200 transactions payment threshold set for 2023 and previous tax years?

The 2023 federal reporting threshold of over $20,000 and 200 transactions is a reporting requirement, but companies may still send a Form 1099-K for goods or services payments that are less than that amount. Payment apps and marketplaces that have held backup withholding for a payee during calendar year 2023 must file a Form 945 and a Form 1099-K. Also, your state may have a lower reporting threshold, which could result in receiving a Form 1099-K, even if the total gross payments you received in the year did not exceed the federal reporting threshold.

Will I owe taxes on the gross amount reported on the Form 1099-K?

The form provides the gross, or total amount of payments individuals got per app or marketplace. Just because a payment is reported on a Form 1099-K does not mean it is taxable. You will need to use the form and other records to determine your actual tax liability when you file your tax return.

Can I get a 1099-K if I’m not running a business?

People may receive a Form 1099-K from payment apps or online marketplaces they used to sell goods or services, or accepted payments from a bank card.