1099-K
Definition
The IRS form payment platforms and marketplaces, like Amazon, Shopify Payments, Stripe and PayPal, send to report the gross payments they processed for you. The federal threshold is $20,000 and more than 200 transactions per platform, though some states require lower amounts.
Want a deeper explanation?
The 1099-K reports gross amounts, before refunds, fees and chargebacks, so it rarely matches your revenue exactly. That is normal, but the difference should be explainable.
The IRS compares 1099-K totals to your tax return. Watch for: platform totals well above reported revenue with no reconciliation, which can trigger IRS notices.
Example
Your Shopify Payments 1099-K shows $640,000 of gross payments. Your books show $598,000 of net sales, and the difference is refunds, sales tax and timing, which your CPA needs to see reconciled.