If you sell on a marketplace or take payments through an app, the 1099-K threshold has bounced around for four years. For 2026 it landed back at $20,000 and more than 200 transactions.
What a 1099-K is
A 1099-K reports the payments a third party settled for you: a marketplace like Etsy or eBay, a processor like PayPal or Square, a gig platform. It shows gross payments, before fees, refunds, or the cost of what you sold.
The threshold decides paperwork, not tax
This is the trap. The threshold decides whether the platform mails you a form. It does not decide whether you owe tax. Sell for profit under $20,000, get no form, and the income is still reportable. The IRS position has not moved: income is income.
The $20,000 line decides who gets a form. It does not decide who owes tax. Those are different questions.
What lands on the form, and what you owe
A 1099-K shows gross. Your tax is on profit. You subtract platform fees, refunds, the shipping you paid, and the cost of the goods. A reseller who moved $30,000 of inventory that cost $22,000 is taxed on the margin, not the $30,000. That gap is why records matter.
Personal payments are not income
Money a friend sends you through an app for their share of dinner is not income and should not land on a 1099-K. If a personal transfer shows up on the form, you reconcile it rather than pay tax on it. Mark personal and business inside the app.
What a seller does now
Keep the platform gross, your fee reports, and your cost records together. Reconcile the 1099-K against your own books before it goes on the return. If the number looks high, it is counting gross, and your job is to show the real profit. If you sell across platforms and want help sorting the forms from the tax, that is a common cleanup in my office. Book a consultation.