Tax forms from platforms and brands rarely add up to what you actually earned. The total on your 1099s can be thousands of dollars more than your real income, and every so often it comes in lower.
Both cases are fixable. What matters is that your return tells the same story as your records, because the IRS compares the forms it receives against what you file.
What this means for you
- A 1099-K shows the gross amount that went through the platform, before refunds, fees or anything else comes out.
- The same brand payment can show up on two forms. Report it once and keep the proof.
- Getting no form does not make income tax-free. Income is taxable whether or not a form shows up.
- Reconcile your forms to your deposits before you file, not after a notice arrives.
Why your 1099-K doesn’t match your income
A Form 1099-K comes from a payment platform or processor, such as a payment app, a checkout processor for your merch or digital products, or a marketplace. It reports the gross amount of payments you received through it. The IRS instructions define that gross amount as the total without regard to adjustments for credits, discounts, fees, refunds or shipping.
That is why the number is often higher than what reached your bank account. Your income for tax purposes still starts from that gross figure. The refunds and fees are then subtracted on the return rather than left out.
A Form 1099-NEC is different. It comes from a brand or agency that paid you directly for your services, usually by bank transfer or check.
Who has to send you one in 2026
| Form | Who sends it | Federal reporting threshold |
|---|---|---|
| 1099-K | Payment apps, processors, marketplaces | More than $20,000 and more than 200 transactions in the year |
| 1099-NEC | Brands and agencies paying you directly | $2,000 or more for payments made in 2026 |
The 1099-K threshold went back to $20,000 and 200 transactions under the One Big Beautiful Bill Act, replacing the much lower thresholds that had been scheduled. That does not change what is taxable. A platform can still send you a 1099-K below the threshold, and some states have lower thresholds of their own.
What people get wrong
- They report the 1099-K as their profit. It is a gross figure. Refunds, chargebacks and platform fees belong on the return too. Leave them off and you overpay.
- They add up every form and report the total. If a brand paid you through a payment app and also sent a 1099-NEC, the same money is on two forms. IRS instructions say card and payment app transactions belong only on the 1099-K, not on a 1099-NEC, but some brands send both anyway.
- They only report what shows up on a form. Brand deals under the reporting threshold, direct payments and small platform payouts are all still income. The form is a reporting requirement for the payer, not a test of whether you owe tax.
- They run personal money through a business account. Friends paying you back for a trip as “goods and services,” or selling your old camera on the same account, can land on a 1099-K and look like business income.
A worked example
Say you are a creator whose forms for the year look like this:
- A 1099-K from your merch and digital product checkout: $28,400. That total includes $900 you refunded and $1,100 in processing fees.
- A 1099-K from a payment app: $14,000. That includes a $6,000 payment from Brand A and $1,200 friends sent you for a shared trip.
- A 1099-NEC from Brand A: $6,000, the same payment already on the payment app form.
- A 1099-NEC from Brand B, paid by bank transfer: $9,000.
| Item | Amount |
|---|---|
| Total of all forms | $57,400 |
| Less: Brand A payment counted twice | ($6,000) |
| Less: friends reimbursing a trip, not income | ($1,200) |
| Business gross receipts | $50,200 |
| Less: refunds (returns and allowances) | ($900) |
| Less: processing fees (an expense) | ($1,100) |
| Before your other business expenses | $48,200 |
Adding up every form would overstate income by $9,200 before any other deductions. For someone paying self-employment tax plus federal income tax, that difference is real money.
How to fix a 1099-K that is wrong or double counted
- Pull every form and every deposit. List each 1099-K and 1099-NEC next to your bank and platform payout records for the same year.
- Match each brand payment to one form. Where a payment sits on both a 1099-K and a 1099-NEC, keep the invoice, the payment record and both forms together.
- Ask for a correction. The contact information for whoever issued the form is in its upper left corner. Ask a brand to void a 1099-NEC for a payment it made through a payment app, and ask a platform to correct a 1099-K that includes personal transfers.
- Don’t wait on a corrected form to file. The IRS says to file on time and correct the error on your return. Amounts that were never income, like a friend paying you back, are reported and then backed out on Schedule 1 so they net to zero.
- Report business income on Schedule C. Gross receipts go on line 1, refunds on line 2 and platform fees on line 10. Your records should show exactly how the forms tie to those numbers.
- Separate accounts going forward. A dedicated business account and a business profile on each payment app keep personal money off your 1099-K in the first place.
If you skip the reconciliation, the usual result is an IRS notice called a CP2000, proposing tax on the difference between your forms and your return. It is answerable with records, but it is much easier to never get one.
Who this does not apply to
- Creators paid entirely through one platform that sends a single, accurate form, with no refunds or fees to account for.
- Payments you received as an employee on a W-2, which follow different rules.
- Gifted products and free trips, which do not usually appear on a 1099-K but can still be taxable. That is its own topic.
Common questions
I didn’t get a 1099-K this year. Do I still report that income?
Yes. The IRS says plainly that income is taxable whether or not you receive the form. The higher threshold means fewer forms, not less income to report.
My 1099-K includes personal payments. Do I pay tax on them?
No, as long as they really are personal, like a friend repaying you for dinner or a shared trip. You report the amount and back it out so it nets to zero, and you keep records showing what it was. Selling a personal item at a loss is handled the same way. The loss is not deductible, but it is not income either.
A brand sent me a 1099-NEC and I was also paid through a payment app. Which one is right?
The payment belongs on the 1099-K. Report the income once, ask the brand to correct its form, and keep the documents together in case the IRS asks.
Does Florida care about any of this?
Florida has no personal income tax, so this is a federal issue for Florida creators. If you live in another state, your state may have its own, lower 1099-K threshold.
Philip’s take
The biggest mistake here is doing the math in the wrong direction. Creators often start from what landed in the bank and hope it lines up with the forms. It works better to start from the forms, then show each step down to your real income. When you do that before you file, a mismatch is a line on a worksheet. When you do it after a notice, it is a letter with a deadline.
Once your income is steady, it is also worth seeing whether an S corp election makes sense for you, or run your numbers in our S corp calculator for creators.
If you want this done for your own forms, Get My CPA Quote for a fixed fee in writing, or Book 30 Minutes With Philip. You can also see how we work with content creators.
This article is general information, not advice for your situation. How a specific payment should be reported depends on what it was for and how it was paid.