What to do with 1099-K forms

What Is a 1099-K?

A 1099-K is a tax form you receive when you've been paid through a third-party payment processor like PayPal, Venmo, Stripe, Square, or other payment platforms. It reports the gross amount of payments processed on your behalf during the year.

Starting with recent tax law changes, the reporting threshold has dropped to $600. That means if you received more than $600 through any single payment platform, you'll likely get a 1099-K.

Who Gets a 1099-K?

You might receive a 1099-K if you:

• Sell goods or services through an online marketplace (Etsy, eBay, etc.)
• Accept payments through PayPal, Venmo, or Cash App for business transactions
• Use Stripe or Square for your freelance or small business
• Sell tickets, crafts, or other items online

Important: You may also receive a 1099-K for personal transactions that were incorrectly classified. We'll cover how to handle that below.

The $600 Threshold

Previously, you only received a 1099-K if you had over $20,000 in payments and more than 200 transactions. The new rule is much simpler:

• **$600 or more** in gross payments from a single platform = you get a 1099-K
• There is **no minimum transaction count** anymore

This means many more people will see 1099-K forms, even for small side gigs.

Business vs. Personal Transactions

This is where things get tricky. A 1099-K reports gross payments, which can include:

• **Business income** (selling products, freelancing) — this is taxable
• **Personal reimbursements** (splitting dinner, paying back a friend) — this is **not** taxable

What to Do with Personal Transactions

If your 1099-K includes personal payments (like friends paying you back for concert tickets):

1. You still need to report the full 1099-K amount on your return
2. Then you subtract the personal portion as an adjustment
3. In FileJoy, you'll enter the full amount and then mark the personal portion separately

The IRS knows you received the 1099-K, so don't ignore it—even if most of the amount was personal.

How to Enter a 1099-K in FileJoy

Step 1: Navigate to Income

From your dashboard, click Income in the sidebar, then select 1099 income.

Step 2: Add Your 1099-K

Click Add 1099-K and enter the information from your form:

• **Payer name** (the payment platform)
• **Gross amount** (Box 1a)
• **Card/third-party network transactions** if broken out

Step 3: Classify Your Income

FileJoy will ask you to classify the income:

• **Self-employment income** — if you sell goods or services (goes to Schedule C)
• **Personal reimbursements** — if some portion was friends paying you back

Step 4: Review and Save

Double-check your entries and click Save. FileJoy will automatically route the income to the correct schedules on your return.

Tips

• Keep records of personal transactions in case the IRS asks questions
• If you have a side business, track your expenses too—they offset your 1099-K income
• You may receive multiple 1099-K forms from different platforms; enter each one separately
• The amount on your 1099-K is **gross**—it doesn't account for fees or refunds you issued