2026 tax year
1099-K reconciliation calculator
The number on your 1099-K is money that passed through you, not money you kept.
A 1099-K reports the gross payments a platform processed for you, including fees, refunds, and shipping you collected. Taxed on that figure, you would overpay badly. This reconciles the gross down to your actual taxable profit, the number that belongs on your return after every legitimate cost.
The big number, before anything comes out.
Counted in the 1099-K, offset by postage cost.
Enter your 1099-K gross and what came out of it.
Worked example, a $30,000 1099-K
A seller's 1099-K shows $30,000 gross, against $3,000 fees, $1,500 refunds, $2,000 shipping and $9,000 cost of goods, plus $1,000 other costs:
| Line | Amount |
|---|---|
| 1099-K gross (box 1a) | $30,000 |
| Deductions to reconcile | − $16,500 |
| Actual taxable profit | $13,500 |
The real taxable figure is $13,500, not $30,000. Reporting the gross as income would tax you on more than twice what you made. Report the gross where the form asks, then take each of these as a deduction so the tax lands on the $13,500.
Questions
What is the 2026 1099-K threshold?
Platforms issue a 1099-K to far more sellers now that the threshold has dropped from the old $20,000-and-200-transactions to a much lower dollar amount. Whether or not you receive one, the income is taxable, the form changes reporting, not what you owe. Reconcile whatever gross is reported.
Why does the 1099-K include shipping and refunds?
It reports the gross payment volume the processor handled. When a buyer pays for the item plus shipping, that whole amount is processed; when you refund an order, the original payment still counts. So the gross overstates income until you back out shipping costs and refunds.
What if my 1099-K includes personal payments?
Personal reimbursements, splitting rent, repaying a friend, should not be on a business 1099-K, but sometimes are if a business account was used. Separate them out; only business sales are taxable income. Keep records showing which payments were personal.
What records should I keep?
A running total for each line here: platform fee reports, refund records, shipping receipts, and cost of goods for what sold. If the IRS questions the gap between your 1099-K and your reported profit, these are what close it.
Related tools
- Seller profit calculator profit into take-home
- Gig tax by category
- Quarterly tax calculator
Reconciliation estimate for the 2026 tax year. Keep documentation for every line. Not tax advice.