Here’s what to do if you receive this tax form

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Here’s what to do if you receive this tax form

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As millions of Americans gather paperwork to file their returns, many could see a tax form for business payments “

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,” according to the National Taxpayer Advocate.

For 2024, if you had more than $5,000 in business transactions from apps like

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or Venmo, along with online marketplaces like

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, you could receive

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, which reports that income to the IRS.

The 2024 reporting threshold is down from the 2023 limit of more than 200 payments worth above $20,000. For 2025, the

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 no matter the number of transactions, and a limit above $600 applies to calendar year 2026 and beyond, according to IRS guidance released in November.

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Congress enacted the $600 reporting threshold via the American Rescue Plan of 2021, but the IRS has delayed the threshold change amid bipartisan scrutiny from lawmakers and complaints from the tax community.

The IRS in 2023 unveiled phased-in limits to “avoid problems for taxpayers, tax professionals and others,” former IRS Commissioner Danny Werfel said in a statement at the time.

How to report Form 1099-K on your return

While the 1099-K reporting threshold is lower for 2024, “there are no changes in what counts as income,” said April Walker, lead manager for tax practice and ethics with the American Institute of CPAs. “This is just a reporting mechanism.”

This season, you could receive Form 1099-K after selling items, such as vehicles, furniture, clothing or

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” between family and friends shouldn’t be reported via Form 1099-K, according to the IRS.

If you made a profit selling an item — meaning the sales price is more than what you originally paid — you

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on Form 8949 and Schedule D.

You can’t deduct items sold at a loss, but you should

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at the top of

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so you don’t owe taxes on the reported income, according to the IRS. The same strategy applies if you receive Form 1099-K for personal payments.

But if you’re subtracting these payments on Schedule 1, you should keep records, such as receipts, to prove the income isn’t taxable, Walker said.

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