What taxpayers, business owners, and online sellers should know about reporting changes
Form 1099-K is an information return issued by payment settlement entities (PSEs) and third-party settlement organizations (TPSOs) when you receive payments for goods or services through credit cards, debit cards, online platforms, or payment apps.
It reports the total gross amount of reportable transactions—not your net income or profit. Receiving a 1099-K does not automatically mean that all funds reported are taxable. You may deduct legitimate business expenses and fees when calculating your taxable income.
Both the IRS and the payee receive a copy of this form for reporting purposes.
You may receive a Form 1099-K if you:
Keep in mind that even if you do not receive a 1099-K, you are still required to report all taxable income on your return.
Tax Year | TPSO Reporting Threshold | Notes |
2024 | More than $5,000 (gross payments) | Transitional rule; the number of transactions is not considered. |
2025 | More than $20,000 and over 200 transactions | The IRS is reinstating the pre-2021 standard. |
For tax year 2025 (filed in 2026), most small businesses and online sellers will only receive a Form 1099-K if their total payments exceed $20,000 and involve more than 200 transactions. However, all income remains taxable, and it’s essential to maintain proper documentation to ensure accurate reporting.
SAI CPA Services helps individuals and business owners stay compliant and prepared for evolving IRS reporting requirements.
If you have questions about how these changes may affect your tax situation, our team is here to help.
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SAI CPA Services offers expert tax, accounting, and financial solutions with 25+ years of experience. We ensure accuracy, compliance, and growth.
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