1099-K.

In plain English

Form 1099-K (Payment Card and Third Party Network Transactions) is filed by payment processors and apps to report the gross amount they routed to you during the year. It covers credit and debit card sales and money received through third-party platforms, and you get one once your activity crosses the reporting threshold. For 2026, a third-party payment app must send a 1099-K only when your gross payments are over $20,000 and you have more than 200 transactions (restored from the brief $600 rule), while payment card processors report card sales with no dollar threshold. The figure on the form is gross, before fees and refunds, so it usually overstates what you actually kept.

01Why it matters

A 1099-K can report more than you truly earned because it counts gross payments and may include personal reimbursements, so if you do not reconcile it you can overpay tax or get a mismatch notice from the IRS.

02The math, step by step

You sell handmade candles and collect $25,000 across more than 200 orders through a payment app. The app sends a 1099-K showing $25,000 gross. But $400 of that was refunds to customers and $350 was processing fees, so your records need to show the real net, and any personal Venmo payments from friends should never be lumped in as business income.

03What this is NOT

04Receipts

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