Tax on $20,000 Form 1099-K

If you sell items on eBay, drive for Uber or your business accept credit or debit cards, you will probably receive a Form 1099-K.

For individuals, Form 1099-K reports payments to their trade or business.

The income for sole-proprietors is reported on Form 1040 Schedule C as gross receipts with profits subject to the self-employment tax.

For example, you received a Form 1099-K for $20,000 with business expenses of $8,000, which left you with a profit of $12,000. If you are filing as Single and have no other income, your federal tax liability would be approximately $1,400. Additional business expenses beyond $8,000 would reduce your tax liability.