If you sell online via your website, Etsy, eBay, etc., please take note.
The Internal Revenue Service reminds taxpayers earning income from selling goods and/or providing services that they may receive Form 1099-K, Payment Card and Third-Party Network Transactions, for payment card transactions and third-party payment network transactions of more than $600 for the year.
There is no change to the taxability of income; the only change is to the reporting rules for Form 1099-K. As before, income, including from part-time work, side jobs or the sale of goods, is still taxable.
Taxpayers must report all income on their tax return unless it is excluded by law, whether they receive a Form 1099-NEC, Non-employee Compensation; Form 1099-K; or any other information return.
The IRS emphasizes that money received through third-party payment applications from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable.
If a Form 1099-K is incorrect and reflects income they didn’t earn, they should call the issuer. The IRS cannot correct it.
Visit frequently asked questions on IRS.gov for more information.