If you sold personal items at a loss, you have 2 options to report the loss: Report on Schedule 1 (Form 1040) Personal Items Sold at a LossĪ loss on the sale of a personal item isn't deductible. If you sold a mix of personal items at a loss and a gain, report them separately. How you report these payments on your tax return depends on whether you sold the item at a loss or a gain.
You may get a Form 1099-K if you received payments for a personal item you sold through a payment app or online marketplace.Ī personal item is something you owned for personal use such as a car, refrigerator, furniture, stereo, jewelry or silverware, etc. If you sold goods, rented property or provided services.How you report Form 1099-K payments on your tax return depends on the type of transactions you did: Use Form 1099-K with your other tax records to help figure and report your correct income on your tax return. Use Form 1099-K to Help Report Your Income Good recordkeeping is important to support the income and deductible expenses you report on your tax return. Check the gross amount for expenses you can deduct (fees, credits, refunds, shipping, refunds, etc.).Confirm the gross payment amount is accurate.These may include reports from payment apps or online marketplaces, payment card receipts or merchant statements. You can deduct them from the gross amount.Ĭompare the gross payment amount to your records. It doesn't include adjustments for fees, credits, refunds, shipping, cash equivalents or discounts. The gross payment amount (Box 1a) on Form 1099-K reports the total payments you received. Review the information on the Form 1099-K to make sure it's correct. Here's what to do if you receive a Form 1099-K: Check the Information on the Form Take these steps if you receive a Form 1099-K in error. These payments aren't taxable income.īe sure to note these types of payments as non-business when possible in the payment apps.
For example: Sharing the cost of a car ride or meal, receiving money for birthday or holiday gifts or getting repaid by a roommate for a household bill. Money you received from friends and family as a gift or reimbursement of a personal expense should not be reported on a Form 1099-K. Find more information on the change in reporting requirements.īack to top What Shouldn't Be Reported on Form 1099-K The reporting threshold for third party settlement organizations, including payment apps and online marketplaces, was lowered to $600 by the American Rescue Plan Act of 2021. There are no changes to what counts as income or how tax is calculated. The $600 reporting threshold started with tax year 2023. Payment apps and online marketplaces are required to file a Form 1099-K if the gross payments to you for goods and services are over $600. They are not payments for goods or services. Gifts or reimbursement of personal expenses from friends and family should not be reported on Form 1099-K.
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