After years of confusion around the 1099-K rules, the IRS has finally clarified what applies for 2026 filings. For 2025 income reported in early 2026, the widely discussed $600 threshold does not apply; the rules have reverted to the traditional reporting standard.

This matters if you collect rent online, run a business, or receive payments through platforms. These forms report gross payments, not taxable income, and mismatches are one of the most common reasons investors and business owners receive IRS notices.

Understanding what changed now allows you to prepare proactively, so your reporting is clean, accurate, and aligned with your overall tax strategy, not just the forms you receive in January.

The Biggest 1099-K Mistake We See

Many taxpayers assume that if they do not receive a Form 1099-K, the IRS does not know about the income.

That assumption is incorrect.

Payment platforms report activity to the IRS. Your tax return must still align with what those systems expect to see. When it does not, IRS mismatch notices are triggered automatically.

What is Form 1099 K?  

Form 1099 K is an information return issued by payment platforms and marketplaces. It reports the gross amount of payments processed for goods and services during the year.

For example:

• Real estate investors may receive a 1099-K for rent collected through platforms

• Business owners may receive one for card or online payments

• Side hustlers may receive one for marketplace or gig income

The form tells the IRS how much money flowed through the platform. It does not determine how much tax you owe.

What Changed With the 1099-K Rules for 2026 and Why It Was So Confusing

Here is the simple explanation.

1. Congress originally lowered the 1099-K threshold to $600 under ARPA.

2. The IRS delayed enforcement for multiple years.

3. Then a later law restored the original rule.

The IRS has now confirmed that for 2025 income, the 1099-K threshold for 2026 filings is back to more than $20,000 and more than 200 transactions on the same platform.

This confirmation appears in IRS guidance and FAQs following Notice 2024-85 and subsequent legislation.

The 1099-K 2026 Threshold Explained

You will generally receive a Form 1099-K for 2026 if both conditions are met on one platform:

• More than $20,000 in payments

• More than 200 transactions

The threshold applies per platform, not across all platforms combined.

Common platforms include PayPal, Venmo, Cash App, Stripe, Airbnb, Etsy, and eBay.

Who Is Most Likely to Receive a Form 1099-K in 2026

• Real estate investors collect rent through apps or booking platforms.  

• Business owners accept card payments through processors.  

• Contractors and freelancers using payment apps for goods and services.  

• Side hustlers with many small transactions.  

• Anyone who mixes personal transfers with business activity inside the same app.  

Why the 1099-K 2026 Threshold Matters for Your Tax Strategy

A Form 1099-K is not a tax bill.
But it is an IRS data point.

Platforms report gross payments, which may include:

• Merchant fees

• Refunds

• Chargebacks

• Security deposits or reimbursements

Example

A landlord collects $28,000 through one platform.
After fees and deposits, taxable rent is $24,300.

If the tax return reports $24,300 without documentation reconciling the difference, the IRS system may flag the return automatically.

This is how mismatch letters happen.

How to prepare now for the 2026 filing season  

1. Review how you accept payments  

Use business focused tools for business income.  

Avoid routing rent and business revenue through personal peer-to-peer accounts.  

2. Separate personal and business activity  

Do not mix in the same account.  

Keep a dedicated business bank account and a dedicated business payment profile.  

3. Clean up bookkeeping monthly  

Match deposits to invoices and rent rolls.  

Reconcile platform payouts for bank deposits.  

Track fees as expenses.  

4. Build an audit ready paper trail  

Save monthly platform statements.  

Save lease ledgers and rent collection reports.  

Keep notes for unusual deposits like reimbursements.  

What to do if you receive a 1099 K in early 2026  

• Check the form and compare it to your books.  

• Confirm that it is reporting business activity. Not personal transfers.  

• Confirm whether the number is gross and how fees are handled.  

• Report the correct income on your return.  

• Deduct your related expenses so you pay tax on profit. Not on gross receipts.  

• Contact a CPA if the form looks wrong or includes mixed payments.  

Important related reminder about 1099 NEC and 1099 MISC  

• Form 1099 K is issued by payment platforms.  

• Form 1099 NEC and 1099 MISC are usually issued by businesses to vendors and contractors.  

• Your earlier 1099 guide still applies for contractor compliance workflow.  

• Form 1099 NEC is generally for nonemployee compensation.  

• Form 1099 MISC is generally for rent and certain other miscellaneous payments.  

• The key theme is the same: file on time, use clean records, and e-file, when possible, to reduce errors.  

Here’s how the IRS truly distinguishes between 1099 workers and employees in 2025.

Also, let’s talk about how to hire your kids and whether a W-2 or a 1099 is the right move.

Final thoughts  

The return to the $20,000 and 200 transaction threshold is good news. It reduces surprise forms for many small sellers and casual users. But it does not remove your duty to report taxable income correctly.  

Clean records and clean separation of accounts will protect you. Especially if you collect rent online or run payments through multiple platforms.

FAQs  

1. What is a 1099 K?  

A tax form that reports gross payments you received through payment platforms for goods and services.  

2. What is the 1099 K threshold for forms issued in 2026?

For 2025 income, the federal threshold is more than $20,000 and more than 200 transactions on the same platform.  

3. Do real estate investors need to worry?

Yes, if you collect rent through apps or platforms, you may receive a 1099 K. Rent is generally taxable even if no form is issued.  

4. Do I owe taxes only if I receive a 1099 K?

No. You must report taxable income even if no form is issued.  

5. Can personal payments be counted as business payments  

Yes, platforms can misclassify activity. Keep personal and business separate?  

6. Which platforms send a 1099 K?

Common examples include PayPal. Venmo. Cash App. Stripe. Airbnb. Etsy. eBay.  

7. What if my state has different rules?

Some states have lower thresholds. You may still receive a form even if you do not meet the federal limit.  

8. Does the 1099 K amount subtract fees or refunds?

Often it is gross. Always reconcile to your records. TaxAct Blog+1  

9. What if I get a 1099 K by mistake?  

Reconcile the form to your books. Then report the correct amounts on your tax return. Work with a CPA if it is materially wrong.  

10. How can real estate investors avoid IRS issues?

Separate rent. Deposits. Reimbursements. And personal transfers. Keep clear monthly records.  

Need Help Staying Compliant Before the 2026 Form 1099-K Update?

Need help creating a compliant, customized entity setup and clean reporting workflow for 2026  

Reach out to INVESTOR FRIENDLY CPA® for guidance built to protect you from IRS mismatch letters and keep your structure audit ready.  

We Help You With  

• Entity structuring designed for tax efficiency and proper reporting  

• Clean bookkeeping systems so your 1099-K, 1099-NEC, and 1099-MISC match IRS data.  

• Separation of personal and business activity to avoid misclassified payments  

• Family payroll and documentation for compliant income shifting  

• Guidance on rent collection, platform payouts, merchant fee tracking, and audit-ready records  

• Travel, auto, and business expense compliance  

• IRS-compliant job descriptions for all family members working in the business  

Connect With Us  

Toll Free: 1-800-522-6091  

Email: clients@investorfriendlycpa.com

Schedule a FREE Consultation Call Today  

Take the first step toward cleaner records, smarter tax planning, and stress-free 2026 filing.