Some gig workers get a 1099-K in the mail. CPA and TurboTax Expert Miguel Burgos explains what the form is, who gets it and how it affects your taxes.
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00:00Well, there are a ton of gig
00:07workers out there these days,
00:08and don't think they get off
00:10scot-free from filing tax
00:12returns, just because they live
00:13a very simple life. In some
00:15instances, the IRS still wants
00:17their cut. CPA and TurboTax
00:19expert Miguel Burgos is here
00:21with us right now to talk about
00:22this. All right. So the first
00:23thing these people need to know
00:24is that they're going to
00:25receive a different form in the
00:26mail, and it's called the 1099
00:28K. Who gets this?
00:31Well, Tracy, the 1099 K, it's a
00:33form that will be received by
00:35those taxpayers that had
00:38received payments to third
00:39party payment processors. So
00:42that means people that receive
00:43payments through mobile apps or
00:45through credit and debit cards.
00:47It's now with the shared
00:49economy, we see more and more
00:50people using this kind of
00:51payments. And also, we see more
00:55and more people that with the
00:56new thresholds will be likely
00:57to receive a form 1099 K.
00:59Right. And so what are the new
01:00thresholds? Because they were
01:01higher at one point, weren't
01:02they?
01:03Correct. Well, to be honest,
01:04Tracy, during the last, I would
01:06say two or three years, we've
01:07seen the IRS going up and down
01:09with the threshold and trying to
01:10help the taxpayers with the
01:11transition. Previous tax year,
01:14the filing threshold was $20,000
01:17and 200 transactions. So once
01:20they surpassed the $20,000 and
01:22had over 200 transactions, the
01:24IRS would require this third
01:26party payment processing
01:27companies to send the 1099 K
01:30form. Now for this year, 2024
01:34that we're filing now in 2025,
01:36it's once you go over $5,000,
01:38regardless of the amount of
01:40transactions, you are very
01:42likely to receive for 1099 K. It
01:44is also likely the IRS has
01:46announced that that amount, the
01:47threshold will keep going down
01:49for the next couple of years,
01:51down to $600. But for this
01:532024 tax year filed on 2025,
01:57it's once you hit more than
01:59$5,000, you're very likely to
02:01get that form 1099 K if you
02:03receive payments through debit
02:04cards, credit cards, or mobile
02:07apps.
02:08Right. Okay. So when these
02:10people receive these forms, what
02:12do they actually do with them?
02:13And we don't want them to panic
02:15or anything like, so they have
02:17to report something clearly.
02:19Correct. And something to
02:20remember is that 1099 K it's
02:23considered an informational
02:24return, which means, you know,
02:27it's a measure that the IRS has
02:29in place to monitor how the
02:32funds are being transferred and
02:33how can taxpayers that are
02:35mostly self-employed or that,
02:37that, uh, has their own
02:38business can potentially be
02:40generating any sort of income.
02:42So remember, let's say for
02:44example, that a taxpayer gets a
02:461099 K reporting $6,000 that
02:49were paid through how any of
02:50this mobile apps or credit or
02:52debit card, it doesn't mean
02:54that your business has exactly
02:56$6,000 worth of income, but it
02:58gives you a general idea and it
03:00gives the IRS a general idea.
03:02What are they looking for when
03:03they look into how much income
03:05your business had? So although
03:07you might get this or some
03:08taxpayers perhaps had less than
03:10$5,000 and don't get a 1099 K
03:13still is your responsibility to
03:15figure out, to keep track of
03:16your income and expenses
03:18throughout the year and report
03:20them accurately while keeping
03:22in mind that some of it either
03:23through a form 1099 NEC or a
03:26form 1099 K will be reported to
03:28the IRS.
03:30Right. So bottom line,
03:31everything's reported to the
03:32IRS reported on your tax return.
03:35And if you need help, there's
03:36definitely products out there to
03:37help you. Correct?
03:39Correctly. If you have any
03:40question about this form,
03:41remember TurboTax.com either
03:43you'll have resources, or you
03:45can actually talk to a, to a tax
03:47expert, just like we're talking
03:48right now to answer your
03:49questions and make sure that you
03:51finish your return. You do it
03:52with confidence and either
03:54reducing as most as possible
03:55your balance due in terms of
03:57taxes or getting your best
03:59possible tax refund.
04:02Amazing. Miguel Burgos, CPA and
04:04TurboTax expert. Thank you for
04:06sharing all of that.
04:07Oh, my pleasure. Have a good
04:08one.