Tips for Taxpayers Who Received an Incorrect Form 1099-K, FS-2023-7

The IRS has offered tips to taxpayers who received an incorrect Form 1099-K, Payment Card and Third-Party Network Transactions or received one of these forms in error. 2022 transactions were reported on the form taxpayers received by January 31, 2023. If the information on the form is incorrect or wrong, taxpayers are directed to contact the issuer of the Form 1099-K immediately. The issuer’s name appears in the upper left corner on the form along with their phone number. Further, taxpayers should keep a copy of all correspondence with the issuer for their records.

If taxpayers can’t get a corrected Form 1099-K, they should report the information on Schedule 1 (Form 1040), Additional Income and Adjustments to Income, as follows:

• Part I – Line 8z – Other Income – Form 1099-K Received in Error.
• Part II – Line 24z – Other Adjustments – Form 1099-K Received in Error.

The net effect of these two adjustments on adjusted gross income would be $0.

Personal Item Sold at Loss

If a taxpayer receives a Form 1099-K for a personal item sold at a loss, report the information on Schedule 1 with offsetting transactions. The net effect of these two adjustments on adjusted gross income would be $0.

Personal Item Sold at Gain

If a taxpayer sells an item owned for personal use, they should report the gain as any other capital gain on Form 8949, Sales and other Dispositions of Capital Assets, and Schedule D (Form 1040), Capital Gains and Losses.

Mix of Personal Items Sold

If a taxpayer sold an item owned for personal use at a gain, see Personal items sold at a gain for information on how to report. For personal items sold at a loss, follow the instructions for Personal items sold at a loss.

New Reporting Threshhold

The IRS announced that the new Form 1099-K reporting threshold will start in tax year 2023.

• The old threshold was $20,000 and 200 transactions per year. This applies to tax year 2022 and prior years.
• The new threshold is more than $600. This applies to tax year 2023 and future years.