This article was updated for Tax Year 2023, last edited on December 18th, 2023.
The Form 1099-K reports payment transactions, such as credit card sales or third party transactions from networks such as PayPal, Venmo, Zelle, and CashApp. The idea behind a 1099-K is to track business income for goods or services sold where the payments were reported through an app or online platform.
For 2023, a 1099-K will be issued to those who received gross payments for goods or services that exceed $20,000 through the online platforms noted above, among others, from over 200 transactions.
Note that not all of the transactions on your 1099-K may be taxable. For example: if a 1099-K is issued that includes the amount your roommate reimburses you for their half of rent, this would not be taxable.
The IRS advises taxpayers using online payment apps for non-taxable items (such as your roommate sending you money for their half of rent) to note these types of payments as non-business in the payment apps when possible.
If non-taxable items are included on your 1099-K, the IRS has more information here for how to either get this form corrected or file with that information (if the issuer is unable to correct it).
april supports 1099-K business income filed on a Schedule C, the reporting of 1099-K non-business income, and the adjustment for 1099-K nontaxable income.
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