Guide · 7 min read · Updated August 2026
Two forms, one pile of income. Here's which is which, why the numbers never match your bank account, and how to avoid paying tax on the same dollars twice.
| 1099-K | 1099-NEC | |
|---|---|---|
| Who issues it | The payment platform (Stripe, PayPal, Etsy) | Your client or the business that hired you |
| What it reports | Gross payment volume processed | Total paid for services |
| Fees included? | Yes — gross, before platform fees | No — the net amount paid to you |
| Threshold | $5,000 (2024) / $2,500 (2025) / $600 (2026) | $600 per payer |
| Deadline to you | January 31 | January 31 |
| Typical recipient | Etsy, Shopify, rideshare, marketplace sellers | Consultants, freelancers, contractors |
| Where it goes | Schedule C gross receipts | Schedule C gross receipts |
1099-K reports gross volume. Everything the platform took out afterwards is still in that number. Take a designer who sold $42,000 through Stripe:
Report $42,000 as gross receipts, then deduct the $1,260 in fees and $1,140 in refunds/chargebacks as expenses. Your profit is identical, but the return matches what the IRS already has on file — which is what keeps the letter from arriving.
SnapBooks records income, fees, and refunds as they happen — so reconciling your 1099-K takes minutes, not a weekend.
Start freeA 1099-K reports the gross payment volume a third-party settlement network processed for you — Stripe, PayPal, Square, Etsy, Shopify Payments, Venmo business, Uber. It reports money moved through the platform, not your profit, and it is issued by the platform rather than your client.
A 1099-NEC reports non-employee compensation: a client paid you $600 or more directly for services during the year, usually by check, ACH, or bank transfer. The client issues it by January 31.
Yes, and it is the most common 1099 mistake. If a client pays you through a card or payment app and also files a 1099-NEC, the same dollars land on two forms. Report your actual total revenue once on Schedule C — do not add the forms together.
The threshold has been phased down: $5,000 for 2024, $2,500 for 2025, and $600 for 2026 payments. Many platforms issue below the threshold anyway, and some states have their own lower thresholds.
1099-K reports gross volume before platform fees, processing fees, refunds, and chargebacks. Report the gross figure as income and deduct the fees and refunds as business expenses — that reconciles to your bank deposits.
Yes. All business income is taxable whether or not a form was issued. If your net self-employment income is $400 or more, you owe self-employment tax and must file Schedule C and Schedule SE.
Ask the issuer for a corrected form before you file. If they won't correct it, report the amount they reported and deduct the difference with a clear explanation on Schedule C, keeping records that support your number.