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Tax debt help for online sellers

Your 1099-K, explained. Then a plan.

Online seller packing orders into boxes at a garage workbench, shelves of stock
Updated October 8, 20264 sourcesFact checked

Self employment tax calculator

Your profit in. Your quarterly number out.

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Penalty calculator

See what late filing and late paying add.

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Why it matters

Marketplaces report what you sell. The IRS sees that form, so missing income is easy for it to spot.

The form shows gross sales, not profit. Your costs still matter, but only with records.

If you got a bill from a 1099-K, a tax pro can check it before you pay.

  • Payment apps and online marketplaces must send a Form 1099-K when you get over $20,000 in more than 200 transactions. You may get one below that.
  • The IRS counts driving for rides or deliveries, running errands and selling goods online through an app as gig work.
  • The IRS looks at whether you run an activity like a business that wants a profit, or as a hobby.
  • You owe self employment tax once your net earnings from self employment hit $400 in a year.

What a tax pro may ask you

Have these ready. Clear answers help a tax firm see what fits you.

  • Which marketplaces you sold on
  • If you have records of what you paid for items
  • Which tax years you have not filed
  • The notice code in the top right corner of any IRS letter

Common questions

Why did I get a 1099-K?

Marketplaces must send one when you get over $20,000 in more than 200 transactions. Some send it below that.

Does the 1099-K show my profit?

No. It shows the payments you got. Keep records of what you paid for items so your tax is based on profit.

Can a tax pro stop IRS collection?

They can ask the IRS for a payment plan, a hold, penalty relief or an offer, based on your facts. Results depend on your situation. Not every case qualifies.

Ways to get help

Offer in compromise: Ask the IRS to take less than you owe. Hard to get.Payment plan: Pay what you owe a little each month.Not collectible: The IRS pauses collection while money is too tight.What happens if I owe the IRS and can't pay?What happens if I owe back taxes?I owe the IRS money. What do I do first?

Results depend on your situation. Not every case qualifies.

Sources

  1. IRS: Understanding your Form 1099-K
  2. IRS: Gig economy tax center
  3. IRS: Know the difference between a hobby and a business
  4. IRS: Self employment tax
Other jobs

We help a lot of jobs

Self employed graphic designer at a home studio desk with a sketch tabletSelf employedNo withholding means the tax bill comes all at once.Gig worker in a hoodie with a delivery bag on a bike at a city cornerGig workersApp pay is taxable, 1099 or not.Rideshare driver in his 40s leaning on his clean sedan at a curb, phone in handRideshare driversMiles matter when the 1099 comes.Delivery driver carrying a box up porch steps, brown jacket, smilingDelivery driversDelivery pay, no withholding.Owner operator truck driver standing by the cab of his semi at a truck stop at dawnOwner operatorsYour own truck, your own Form 2290.

Run the numbers with our free tax tools, like the penalty and payment plan math.

See your options

A few questions. A tax pro calls you back.

Free tools: penalty calculator, 10 year clock, IRS offer data

Free to use. Not the IRS or any government agency. Results depend on your situation. Not every case qualifies.