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Desktop: Form 1099-K - Payment Card and Third Party Network Transactions

Form 1099-K, Payment Card and Third Party Network Transactions, is a report of payments a taxpayer received for goods or services during the year from:

  • Credit, debit, or stored value cards such as gift cards (payment cards);
  • A payment app or online marketplace, also called a third party settlement organization (TPSO).

A TPSO is required to issue Form 1099-K to a taxpayer if the total amount they received exceeds certain thresholds:

  • 2024: $5,000
  • 2025: $2,500
  • 2026 and following: $600

A TPSO may also issue the taxpayer Form 1099-K if the total payments are less than the threshold, but irrespective of whether the taxpayer received a Form 1099-K, they must still report any income on their tax return. This includes payments for goods and services they provide as well as property they rent.

The payments that give rise to Form 1099-K being issued can be made through a variety of online forums:

  • Payment app
  • Community marketplace
  • Craft or maker marketplace
  • Auction site
  • Car sharing or ride-hailing platform
  • Ticket exchange or resale site
  • Crowdfunding platform
  • Freelance marketplace

A taxpayer who accepts payments on multiple platforms may receive multiple Forms 1099-K. Additionally, the amount in Box 1a of Form 1099-K may include different kinds of payments for both personal and business reasons.

Note that the amount in Box 1a is the gross amount received. The taxpayer may have received less due to adjustments for fees, credits, refunds, shipping, cash equivalents, and discounts. The taxpayer can deduct those items from the gross amount when including the income on their tax return.

Entering Form 1099-K for business income

If the payment reported on Form 1099-K relates to the taxpayer's business or rental property, include the amount in Box 1a in gross receipts of the form to which the payment relates, whether Schedule C, E, or F.

If gross receipts come from several sources, consider using the F10 key to itemize the sources between those reported on Form 1099-K and other means, such as cash/check. This itemization prints with the schedule.

If Form 1099-K reflects any federal income tax withholding in Box 4, those withholdings are reported on Form 1040. From the Main Menu of the tax return select:

  • Payments, Estimates & EIC
  • Other Federal Withholdings [Form 1099] - Enter the 1099-K information in the "Tax Withheld from Other Form(s) 1099" section.

Entering Form 1099-K for personal items sold at a loss

Personal losses are not deductible, however the Form(s) 1099-K related to the personal losses must be reported in the tax return. Where and how they are reported depends on the tax year. Click button below for the tax year you are working on for instructions.

Tax year 2024 and forward

The sale can be reported either on Schedule 1 or on Form 8949.

Schedule 1

Schedule 1 includes a line at the top of the form to inform the IRS the amount that was reported to the taxpayer on Form(s) 1099-K either in error or for personal items sold at a loss. To enter this amount, from the Main Menu of the tax return (Form 1040 or 1040-NR) select:

  • Income
  • Amount Reported on Form(s) 1099-K Included in Error - Enter the amount reported to the taxpayer on Form 1099-K in error or for personal items sold at a loss.

Form 8949

To report the loss on Form 8949 select:

  • Income
  • Capital Gain/Loss (Sch D) - Click New.
    • Description of Property - Enter a short description. Including "1099K" will help distinguish it from other capital transactions.
    • Form 1099-B Type - Choose "Form 1099-B Not Received".
    • Date Acquired - Enter the date the property was acquired.
    • Date Sold - Enter the date the property was sold.
    • Sales Price - Enter the sales price as reported on Form 1099-K Box 1a.
    • Cost - Enter the cost of the property.

When finished with these entries, select Ok to arrive at the Schedule D - Capital Gains & Losses Information Menu. From here select:

  • Adjustment Code - Check code L "Nondeductible Loss other than a Wash Sale", then click Ok.
  • Adjustment to Gain/Loss - Enter the amount of the loss but as a positive number.
Tax years prior to 2024

The sale can be reported either on Schedule 1 or on Form 8949.

Schedule 1

If you're reporting the loss on Schedule 1 you'll make two entries, one to report the income and another to adjust out the income due to the sale resulting in a loss.

First, to report the income select:

  • Income
  • Other Income
  • Other Income
  • Other Income - Click New.
    • Description of Other Income - Enter "FORM 1099K PERSONAL SOLD AT A LOSS".
    • Amount of Other Income - Enter the amount in Form 1099-K Box 1a. (Do not check the "Earned Income" check box.)

Next, to report the adjustment select:

  • Adjustments
  • Other Adjustments
  • Other Adjustment
    • Other Adjustment Description - Enter "FORM 1099K PERSONAL LOSS".
    • Taxpayer's or Spouse's Amount - Enter the same amount in the previous entry (as a positive number).

Form 8949

To report the loss on Form 8949 select:

  • Income
  • Capital Gain/Loss (Sch D) - Click New.
    • Description of Property - Enter a short description. Including "1099K" will help distinguish it from other capital transactions.
    • Form 1099-B Type - Choose "Form 1099-B Not Received".
    • Date Acquired - Enter the date the property was acquired.
    • Date Sold - Enter the date the property was sold.
    • Sales Price - Enter the sales price as reported on Form 1099-K Box 1a.
    • Cost - Enter the cost of the property.

When finished with these entries, select Ok to arrive at the Schedule D - Capital Gains & Losses Information Menu. From here select:

  • Adjustment Code - Check code L "Nondeductible Loss other than a Wash Sale", then click Ok.
  • Adjustment to Gain/Loss - Enter the amount of the loss but as a positive number.

Entering Personal Items sold at a Gain

Personal items sold at a gain are reported on Form 8949, Sales and other Dispositions of Capital Assets. To report a sale at a gain, from the Main Menu of the tax return (Form 1040) select:

  • Income
  • Capital Gain/Loss (Sch D) - Click New.
    • Description of Property - Enter a short description. Including "1099K" will help distinguish it from other capital transactions.
    • Form 1099-B Type - Choose "Form 1099-B Not Received".
    • Date Acquired - Enter the date the property was acquired.
    • Date Sold - Enter the date the property was sold.
    • Sales Price - Enter the sales price as reported on Form 1099-K Box 1a.
    • Cost - Enter the cost of the property.

Note: This is a guide on entering a Form 1099-K into the TaxSlayer Pro program. This is not intended as tax advice.

Additional Information:

IRS: What to do with Form 1099-K

IRS: Form 1099-K FAQs: Common situations