IRS 1099-K Explainer
The New 1099-K Rule is Here.
The IRS is changing how payment apps and online marketplaces report your income. This guide makes it simple to understand what's new, how it affects you, and what you need to do.
What's Changing: A Phased Rollout
The old rule required a Form 1099-K only for over $20,000 *and* more than 200 transactions. The IRS is now phasing in a much lower threshold with no transaction minimum. This section visualizes how the reporting requirement drops over the next few years, significantly increasing the number of people who will receive this form.
The key takeaway: Many more people, including casual sellers and freelancers, will receive a 1099-K starting with the 2024 tax year.
Does This Affect Me?
This new rule doesn't affect everyone in the same way. The impact depends on how you use payment apps and online platforms. Select the option below that best describes your activity to see personalized guidance and understand your responsibilities.
Please select a user type above to see relevant information.
Real-World Scenarios
Seeing how the rules apply to everyday situations is the best way to understand them. The amount on a 1099-K is the *gross* payment, not necessarily your *taxable income*. Click on the scenarios below to see a breakdown of what happens, whether the money is taxable, and how to report it correctly.
Your Compliance Action Plan
Feeling prepared is the best way to avoid tax-season stress. Follow these simple but crucial steps throughout the year to ensure you're ready for the new 1099-K rules. This proactive approach will save you time and help you report your income accurately.
A Note on Zelle
You might have noticed Zelle isn't mentioned often. That's because it works differently. Zelle facilitates direct bank-to-bank transfers and doesn't hold the money, so it's not required to send Form 1099-K. However, this is a critical point: **The legal requirement to report all your taxable income has not changed.** If you receive payment for goods or services via Zelle, that income is still taxable and must be reported on your tax return, even though you won't get a 1099-K for it.
Frequently Asked Questions
Here are answers to some of the most common questions about the 1099-K changes.
