Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
Updated August 3, 2026. Quick answer: the 1099-K reporting threshold is more than $20,000 AND more than 200 transactions — both, not either. The much-publicised $600 threshold was retroactively erased in 2025. If you read somewhere that selling $600 of anything triggers a form, that guidance is describing a law that no longer applies and never fully took effect.
Schedule F (Form 1040) for 2025, line by line: Schedule F lines 1 and 2.
Picking the Schedule C business code for your work (2025 chart): Schedule C code for pet groomers and pet sitters, Schedule C code for florists and Schedule C code for bakers.
Picking the Schedule C business code for your work (2025 chart): Schedule C code for massage therapists.
More on the 2026 tax figures: the 2026 1099-K threshold.
More on the 2027 tax figures: the 2027 1099-K threshold.
Picking the Schedule C business code for your work (2025 chart): Schedule C code for tutors and teachers, Schedule C code for personal trainers and Schedule C code for Etsy sellers.
Picking the Schedule C business code for your work (2025 chart): Schedule C code for rideshare and delivery drivers, Schedule C code for photographers and Schedule C code for hair, nail, and beauty.
Related reading on this site: IRS Publication 525.
S corporation return (Form 1120-S) for 2025, read line by line: Form 1120-S Schedule B questions 13 to 16.
Schedule C and Schedule SE (Form 1040) for 2025, read line by line: Schedule C line 1, Schedule C lines 2 to 5 and Schedule SE lines 1 to 4.
Read box by box from the IRS form text: Form 1099-DA boxes explained, Form 1099-DA boxes 1a and 1b and Form 1099-DA box 11.
Related reading on this site: Estimated tax due dates 2027.
The recipient copy of Form 1099-G or 1099-K, read box by box: 1099-K box 1a, 1099-K boxes 1b, 2, 3 and 1099-K boxes 1c and 1d.
The recipient copy of Form 1099-NEC or 1099-MISC, read box by box: 1099-NEC box 4 and 1099-MISC box 4, 1099-MISC box 1 and 1099-MISC box 10.
More IRS forms and schedules, read line by line: Form W-9 instructions.
More IRS forms and schedules, read line by line: Form 8300 instructions.
More IRS forms and schedules, read line by line: Schedule C instructions.
The current rule
A third party settlement organization shall be required to report any information under subsection (a) with respect to third party network transactions of any participating payee only if— (1) the amount which would otherwise be reported under subsection (a)(2) with respect to such transactions exceeds $20,000, and (2) the aggregate number of such transactions exceeds 200.
— 26 U.S.C. § 6050W(e) (as amended by Pub. L. 119-21, § 70432(a))
Note the word and between the two paragraphs. It is a conjunctive test: a payment app must report only if you exceed both the dollar amount and the transaction count. Exceeding one alone does not trigger the form.
What happened, and why so much guidance is wrong
Cornell LII editorial/amendment note on 26 U.S.C. §6050W: ‘Subsec. (e). [Pub. L. 119–21, § 70432(a)(1)] amended subsec. (e) generally.’ Effective date note: ‘The amendment made by this subsection shall take effect as if included in section 9674 of the American Rescue Plan Act [of 2021].’ Corroborating IRS.gov statement (Form 1099-K FAQs: General Information): ‘The One, Big, Beautiful Bill retroactively reinstated the reporting threshold in effect prior to the passage of the American Rescue Plan Act of 2021 (ARPA) so that third party settlement organizations are not required to file Forms 1099-K…
— Pub. L. 119-21, §70432(a), amending 26 U.S.C. §6050W(e); Cornell LII editorial notes; IRS.gov Form 1099-K FAQs: General Information
The 2021 legislation lowered the threshold dramatically. Implementation was repeatedly delayed, with interim figures announced along the way. Then in 2025 the law was amended to restore the old threshold “as if included in” the 2021 provision — which is retroactive drafting. The lower thresholds are treated as though they had never taken effect.
That is why the ecosystem is stale: an enormous volume of guidance was written during the years when the low threshold was coming, and much of it has never been revised. Any article describing a $600, $2,500 or $5,000 1099-K threshold as current is out of date — those are history now, not a phase-in.
The part that actually matters more than the threshold
IRS.gov, Form 1099-K FAQs: General Information: ‘All income, no matter the amount, is taxable unless the tax law says it isn’t – even if you don’t get a Form 1099-K.’ IRS.gov, Form 1099-K FAQs: What to do if you receive a Form 1099-K (Q6, ‘I sold a personal item and the gross payment amount…
— IRS.gov, Form 1099-K FAQs: General Information; IRS.gov, Form 1099-K FAQs: What to do if you receive a Form 1099-K
Whether income is taxable has nothing to do with whether a form arrives. The threshold governs the payment app’s reporting obligation, not your tax obligation. Someone earning $5,000 from a side activity owes tax on it whether or not anyone sends them a 1099-K.
So the restoration is not the relief it is sometimes presented as. It reduces paperwork and the number of confusing forms. It changes nothing about what you owe.
Selling your own used possessions is different
Clearing out a house and selling furniture, clothes or old equipment is usually not income — you are almost always selling for less than you paid. IRS guidance is explicit that the loss on the sale of a personal item is not deductible, and that a gain on a personal item is taxable.
If a 1099-K arrives anyway for personal items sold at a loss, the reporting route is offsetting entries: the proceeds as other income, and the cost as an offsetting adjustment up to but not more than the proceeds — so the two cancel and nothing is taxed. Do not ignore a form that arrives; report it and offset it.
Date-stamp. This page reflects the law and IRS guidance as at August 3, 2026. This threshold has changed more than once in five years and could change again. Check the current IRS 1099-K page before relying on the figure, and treat any undated article on this subject with suspicion — including the ones that agree with this one.
Figures verified against 26 U.S.C. 6050W(e) and the IRS Form 1099-K FAQs on September 29, 2026.
Related: selling your own things online · estimated taxes and the safe harbour.
General information drawn from the United States Code and IRS guidance, not legal or tax advice. Your own records and any form you have received govern your case, and the IRS is the source for how your return treats them. We sell nothing and we are not affiliated with the Internal Revenue Service.
If the side income is growing, the entity question usually arrives next — whether you actually need an LLC, where the cost can exceed the income.
A different form with a different reporter, and it is routinely confused with this one: the 1099-NEC is what you file when you pay a contractor, and its threshold changed too.