If you made money using apps like PayPal, Venmo, eBay, or even by selling crafts online, you may get a special tax form called a 1099-K. In 2025, more people than ever will receive this form, and it’s important to know how to handle income reported on a 1099-K in 2025.
Let’s break it down so it’s easy to understand. This guide will help you learn what a 1099-K is, why you got one, and how to deal with it when you do your taxes.
What is a 1099-K?
A 1099-K is a form the IRS uses to report money you got through payment apps or credit cards. If you sold things or got paid for work using these tools, and you got over $600 in total during the year, the company may send you a 1099-K.
Here are some examples:
- You sell homemade candles on Etsy.
- You babysit and get paid through Venmo.
- You resell clothes on eBay or Facebook Marketplace.
If you earned more than $600 from any of these in 2025, the company you used will probably send a 1099-K to you and the IRS.
This form shows the total amount you received, not your profit. That’s important to remember!
Why Did I Get a 1099-K?
You got a 1099-K because the government wants to make sure people pay taxes on the money they earn. In past years, the limit was much higher, but now, even small sellers can get this form.
How to handle income reported on a 1099-K in 2025 means being ready to show what part of that money was actually income and what was not.
Some things you might be able to subtract (called deductions):
- The cost of materials (like supplies for your crafts)
- Fees you paid to websites or apps
- Shipping costs
Keep good records so you can prove what you really earned after costs.
What Do I Do With a 1099-K?
When you file your taxes, you must include the income shown on your 1099-K. Even if you didn’t get a form, you still need to report the money.
Here’s how to handle income reported on a 1099-K in 2025:
- Check the amounts. Make sure the number on the form is correct. Sometimes it shows the total before fees or refunds.
- Add up your costs. Find receipts for things you bought to run your business or side hustle.
- Report the net income. That means total income minus your costs. Use IRS Schedule C if you’re self-employed.
- Pay self-employment tax. If you made over $400 after costs, you may owe this tax. It covers Social Security and Medicare.
What If I Just Sold Old Stuff?
Sometimes, people sell used things they already own. This is not usually income, especially if you sold it for less than you paid.
But the app may still send you a 1099-K if it shows over $600 in sales.
In this case, you still need to report it to the IRS so they know you didn’t make money. Write on your taxes that you sold personal items at a loss.
This is still part of learning how to handle income reported on a 1099-K in 2025, even if you didn’t earn a profit.
Tips to Make Tax Time Easier
Taxes can feel scary, but here are some simple tips to help:
- Keep a notebook or spreadsheet with your sales and costs.
- Save your receipts. These help prove your costs.
- Use a tax app or pro. Tax software or a tax preparer can help make sure you do it right.
Knowing how to handle income reported on a 1099-K in 2025 means being prepared before tax season comes.
Final Thoughts
As more people earn money online or through apps, it’s important to understand taxes. Getting a 1099-K doesn’t mean you did something wrong. It just means you earned money in a way the IRS wants to track.
By keeping good records, learning about deductions, and understanding your form, you’ll know exactly how to handle income reported on a 1099-K in 2025. And that means less stress—and fewer surprises—when it’s time to do your taxes.
