Tax Return Changes for Ecommerce Sellers | HelloBooks The 1099-K threshold is back to $20,000 and 200 transactions, and platform backup withholding follows the same test. What online sellers need.
Online sellers were braced for 1099-Ks at much lower amounts. The threshold went back up, but the income is still taxable, and reconciling platform payouts is still the hard part.
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1099-K threshold
Over $20,000 and over 200 transactions
Applies: Retroactive; proposed rules for withholdingFrom IRS.gov · checked October 10, 2026
Marketplaces and payment apps send a 1099-K only when payments exceed $20,000 and transactions exceed 200. Proposed regulations apply the same test to backup withholding by payment platforms.
Many small sellers will receive no form at all. That changes nothing about what is taxable, and it removes a cross-check, so the books carry the whole weight.
Record gross sales, platform fees, refunds and shipping separately rather than booking net payouts as income. Bank feeds bring each payout into HelloBooks, and the AI categorisation sends anything unusual to the review queue, so platform fee changes are spotted early.
The plain-English summary for business owners
Information returns · Form 1099-K
Information returns · backup withholding
By client type · gig workers and creators
General information for tax professionals, not advice on a specific return. Figures are from IRS.gov on the date shown; check the current IRS instructions before filing.
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