What to Do with Your 2024 1099-K

If you receive a Form 1099-K, it’s essential to understand what it means and how to use it when filing your taxes. The IRS requires third-party payment processors (like PayPal, Venmo, or credit card companies) to issue this form to report certain types of income, typically from business transactions. Here’s what you need to know:

1. Why You Received a 1099-K

You will get a Form 1099-K if you:

• Received over $600 in payments through third-party processors.
• Earned income through platforms like eBay, Etsy, or other gig economy platforms. This form reports the gross amount of transactions, meaning it doesn’t account for refunds, fees, or other adjustments.

2. Review the Information

Check that the amounts reported on your 1099-K match your own records. The form lists total payments, but you'll need to separate personal transactions (such as gifts or reimbursements) from business income.

3. Report Your Income

Even if you don’t consider yourself a "business owner," income from side gigs or selling products/services still needs to be reported on your tax return. Use Schedule C for self-employment income or other appropriate forms depending on the nature of your business.

4. Track Deductions

The 1099-K shows gross receipts, but you can deduct any legitimate business expenses such as transaction fees, shipping costs, and supplies to reduce your taxable income.

5. Seek Help if Needed

If you’re unsure how to properly report this form or have questions about deductions, consider consulting a tax professional. This will help ensure that you report everything accurately and avoid potential IRS penalties.

For more information,
1. visit the IRS page: Understanding Your Form 1099-K.
2. Contact Michael O’Hanlan at RMOHC:  michael@rmohc.com