Understanding Amazon 1099-K: Tax Reporting - Seller Bookkeeping
Seller Bookkeeping

Understanding Amazon 1099-K: Tax Reporting

What Amazon reports to the IRS and what you need to track for tax compliance

Updated: November 2025 Read Time: 18 minutes Tax Compliance

What is Amazon 1099-K?

Amazon Form 1099-K is a tax document issued by Amazon to report payment card transactions and third-party network transactions (like bank transfers) to the IRS. For Amazon sellers, the 1099-K is critical—it shows the IRS exactly how much gross payment volume Amazon processed on your behalf during the calendar year. This form is sent to both you and the IRS simultaneously, creating a tax record that must match your reported income.

Critical Distinction: The 1099-K shows GROSS sales only—not net income after fees, returns, or refunds. It includes sales tax collected, shipping charges, and ALL transaction amounts. You're responsible for reconciling your actual net income with the 1099-K amount on your tax return. Discrepancies trigger IRS scrutiny.

2025 1099-K Reporting Thresholds

The 1099-K threshold has changed multiple times. Here's what applies now:

Tax YearDollar ThresholdTransaction CountStatus
2024 (Filing 2025)$5,000+Any numberTemporary threshold (delayed from $600)
2025 (Filing 2026)$20,000+200+ transactionsBoth thresholds must be met
Future Years$600+Any numberOriginal IRS requirement (pending)

Important: Even if you DON'T receive a 1099-K (because you're under the threshold), you are still legally required to report all Amazon income on your tax return. Many sellers make the mistake of thinking "no 1099-K = no reporting obligation." This is false and can trigger audits.

When and How You Receive Your 1099-K

Timeline

  • By January 31: Amazon sends your 1099-K (electronic or physical mail)
  • Same Date: Copy is filed with the IRS automatically
  • February-April: Tax filing season (your taxes must reconcile with 1099-K)

How to Access Your 1099-K

  • Seller Central: Reports → Tax Document Library → Form 1099-K
  • Electronic Delivery: Download PDF directly from Seller Central
  • Physical Mail: Sent to your registered address if you opted out of electronic delivery
  • Multiple Marketplaces: Each Amazon marketplace (US, EU, etc.) sends separate 1099-Ks

What Amazon Includes on 1099-K

ItemIncluded on 1099-K?Notes
Gross sales revenueYESTotal of all successful transactions
Sales tax collectedYESIncluded in gross total (you must separate)
Shipping chargesYESIf charged to customer
Amazon fees (fulfillment, referral)NOThese are NOT deducted (you deduct separately)
Returns and refundsPARTIALMay be reported as negative transactions or adjustments
Loan proceeds (Amazon Lending)NONot included (loans aren't income)
Promotional creditsVARIESDepends on how Amazon coded them

The 1099-K Reconciliation Problem

Amazon's 1099-K often doesn't match your Seller Central reports. Why?

  • Timing Differences: Amazon reports based on shipment date, not payment date. December shipments appear on 2024 1099-K but may not pay until January.
  • Refund Timing: Refunds issued in January may not be reflected on 2024 form.
  • Sales Tax: 1099-K includes sales tax collected. If you collected $10,000 in sales + $800 sales tax, 1099-K shows $10,800 (even though only $10,000 is "sales").
  • Multiple Payments: If you received two payouts in December but one was for December sales and one for prior months, timing creates discrepancies.
  • International Orders: Currency conversions and separate marketplace reporting.

Solution: Reconcile your 1099-K to your actual net income using Amazon's detailed transaction reports. Many sellers use accounting software that automatically reconciles these differences.

1099-K Threshold Calculator

Will You Receive a 1099-K?

Include sales tax, shipping, everything

Gross Sales: $0
Transaction Count: 0
Required Threshold: $0
Will Receive 1099-K? No

What You Need to Track Annually

To properly file taxes and reconcile with your 1099-K, you must track:

  • Gross Sales: Total revenue including sales tax and shipping
  • Sales Tax Collected: Separate from revenue (not taxable income)
  • Amazon Referral Fees: Deducted from your account
  • Fulfillment Fees (FBA): If using FBA
  • Storage Fees: Monthly FBA storage charges
  • Returns & Refunds: Money refunded to customers (reduces taxable income)
  • Cost of Goods Sold (COGS): Product costs
  • All Business Expenses: Shipping, packaging, marketing, software, etc.
  • Currency Adjustments: If selling internationally
  • Promotional Allowances: Any discounts or chargebacks

Common 1099-K Tax Mistakes

Sellers often make these costly errors:

  • Treating 1099-K as Net Income: Many sellers report the 1099-K amount directly as taxable income, forgetting to deduct fees, returns, and COGS. This massively overstates income and tax liability.
  • Not Reconciling: Assuming 1099-K matches Seller Central reports exactly. They don't. Always reconcile.
  • Ignoring Sales Tax: The 1099-K includes sales tax collected. Reporting this as income creates a mismatch with sales tax remitted to states.
  • No Documentation: Receiving a 1099-K without supporting transaction records. If audited, you need proof of what's included.
  • Multi-Platform Mistakes: Reporting $100K on Amazon 1099-K but $80K on Etsy 1099-K without verifying both are accurate.

1099-K Tax Facts

Jan 31

Deadline Amazon sends 1099-K forms

$5,000

2024 threshold ($20K for 2025 onward)

7 Years

How long IRS can audit 1099-K records

CP-2000

IRS notice if 1099-K doesn't match return

50%+

Sellers who misreport 1099-K income

64%

Of sellers report 1099-K info to accountant

1099-K Frequently Asked Questions

What's the difference between 1099-K and my Seller Central reports?

The 1099-K is what Amazon reports to the IRS—gross payment volume only. Seller Central reports show detailed breakdowns by date, with refunds and adjustments. They often don't match due to timing differences (December shipments paid in January), refund timing, and processing delays. Always reconcile both reports to find discrepancies.

Do I report the 1099-K amount or my actual net income?

Report your actual net income (after deducting fees, returns, COGS, and expenses). The 1099-K is just informational for the IRS—it shows what Amazon reported. Your tax return must show the true net profit, which should reconcile back to the 1099-K with supporting documentation. If there's a large discrepancy, attach a statement explaining why.

My sales were $100K but 1099-K shows $110K. Why?

The $10K difference is likely sales tax. The 1099-K includes all payment processing—sales + sales tax collected. If you collected $10K in sales tax on $100K in sales, the 1099-K shows $110K. You must separate sales tax in your records (it's not income; it's a liability to the state).

I didn't receive a 1099-K. Do I still report my income?

Yes! You're legally required to report all income regardless of whether you receive a 1099-K. Many sellers under the reporting threshold make this mistake. The IRS still expects you to file and report income. If you have records proving your sales, you're protected. If you have no 1099-K but didn't report income, that's a bigger audit risk.

What's a CP-2000 notice and why do I care?

A CP-2000 is an IRS notice that says your tax return doesn't match the 1099-K Amazon reported. The IRS wants you to explain the difference or pay more taxes. If your 1099-K shows $100K but you reported $80K income, expect a CP-2000 asking why. This triggers an audit and penalties. Reconcile carefully!

Can I appeal or correct my 1099-K?

If Amazon made an error on your 1099-K (wrong amount, duplicate transactions, etc.), contact Seller Central immediately. Amazon can issue a corrected 1099-K (Form 1099-K-C). However, most discrepancies are timing or sales tax issues, not errors. Document your reconciliation and keep records in case of audit.

Should I hire a CPA for 1099-K reconciliation?

If your Amazon sales exceed $60,000 annually, yes. A CPA ($800-$2,000) ensures proper reconciliation, prevents IRS mismatches, and catches missing deductions. For smaller sellers, accounting software with automated 1099-K reconciliation (like Link My Books or TurboTax) can handle it at lower cost.

How long does the IRS keep 1099-K information?

The IRS can audit you for 3 years (normally), 6 years if significant underreporting, or indefinitely for fraud. Keep all Amazon receipts, transaction records, bank deposits, and reconciliation documents for at least 7 years. The 1099-K is part of your permanent tax file with the IRS.