Form 1099-K - Merchant Card and Third-Party Network Payments
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Form 1099-K is required to be issued by the Payment Settlement Entity (PSE) to the payee to report payments made in settlement of reportable payment transactions. Like Form W-2 or 1099-NEC, this form will be issued to the taxpayer and the IRS by the issuer.
The steps for entering your information from Form 1099-K vary depending on whether your sales are for a business, or hobby.
Business
If you determine that your online sales are an activity you have engaged in for profit, as an Online Auction Seller you are considered a self-employed taxpayer and must file Schedule C with Form 1040. In this situation, you must report all your business income from these sales. You may be able to claim a deduction for certain business expenses. If your net profit is above $400, you will be subject to self-employment taxes in addition to individual income taxes.
If you are not engaged in the activity for profit, then the activity may be considered a hobby. You may not claim hobby expenses (at least through 2025, pending further legislation), but must still report any income received. Also see the Hobby Income and Expenses FAQ.