{"id":8376,"date":"2025-09-15T17:13:58","date_gmt":"2025-09-15T21:13:58","guid":{"rendered":"https:\/\/www.red94.net\/news\/?p=8376"},"modified":"2025-09-15T17:17:46","modified_gmt":"2025-09-15T21:17:46","slug":"3-steps-before-december-31-to-avoid-a-1099-k-surprise-in-your-mailbox","status":"publish","type":"post","link":"https:\/\/www.red94.net\/news\/3-steps-before-december-31-to-avoid-a-1099-k-surprise-in-your-mailbox\/","title":{"rendered":"3 steps before December 31 to avoid a 1099-K surprise in your mailbox"},"content":{"rendered":"

Millions using payment apps<\/strong> could see a new tax form in 2026<\/strong> if their 2025<\/strong> goods-and-services payments top $2,500<\/strong>. Act now to keep personal transfers separate and cut error risks before December 31<\/strong>.<\/p>\n

The IRS is phasing in broader reporting. For 2025<\/strong>, many casual sellers will cross the $2,500<\/strong> line without realizing it, and forms are due to arrive by January 31, 2026<\/strong>. Even below that amount, you might still receive one, so good records and correct tagging matter.<\/p>\n

What really triggers the form from payment apps?<\/h2>\n

Platforms must send a form when goods-and-services<\/strong> payments exceed $2,500<\/strong> in 2025<\/strong>. Personal money between friends or family is not taxable income, but mis-tagged transfers can be reported anyway. You may also receive a form under the threshold; income is taxable whether a form arrives or not. Keep documentation of dates<\/strong>, amounts<\/strong>, and what was sold<\/strong>.<\/p>\n

Who wins and who loses when small sales add up<\/h2>\n

Those who tag transactions correctly and keep receipts can offset non-taxable amounts and report losses on personal items sold at a loss. Those who mix personal and sales transfers or ignore identity requests risk 24% backup withholding<\/strong> starting in 2025<\/strong> if a valid taxpayer ID isn\u2019t provided.<\/p>\n

\u201cDon\u2019t ignore the form, even if you receive it in error or don\u2019t owe tax on the amounts shown.\u201d \u2014 Erin Collins, National Taxpayer Advocate<\/strong>.<\/p>\n

Your three moves to stay on the safe side this year<\/h2>\n

Use these concrete actions to reduce mistakes and headaches:<\/p>\n

\n
\n\n\n\n\n\n\n\n\n
Step<\/strong><\/th>\nDetail<\/strong><\/th>\nDeadline<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Tag transfers<\/td>\nMark personal money as non-business; mark sales as goods\/services; add clear notes<\/td>\nNow<\/strong><\/td>\n<\/tr>\n
Provide your TIN<\/td>\nUpdate profile to prevent 24%<\/strong> backup withholding on reportable payments<\/td>\nBefore first sale<\/strong><\/td>\n<\/tr>\n
Track basis & fees<\/td>\nSave purchase receipts, shipping, and refunds to offset gross amounts<\/td>\nOngoing, monthly<\/strong><\/td>\n<\/tr>\n
Reconcile totals<\/td>\nMatch app totals to your records; prepare for forms due by Jan 31, 2026<\/strong><\/td>\nBy Jan 31, 2026<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n<\/div>\n<\/div>\n