My 1099-K Was Double What I Actually Earned. Here’s a 3-Step Plan

Key takeaways 

• A 1099-K reports gross payments, not your actual take-home income — so a higher number doesn’t automatically mean higher taxes.
• Fees, refunds, and expenses aren’t reflected on the form, which is why the total can look inflated.
• Your tax return determines what you owe, and separating gross income from net earnings helps ensure you don’t overpay.

The first time I opened my 1099-K form, my stomach dropped. 

The number was nearly double what I knew I’d earned from my side hustle. I refreshed the page, checked my bank account, and hoped there was a mistake — but there wasn’t. What I was looking at wasn’t profit — or even my take-home income.

If you’ve experienced that same moment of panic, you’re not alone.

Why the 1099-K looks so scary

A 1099-K reports gross payments, not what you actually kept. Platforms issue it to show the IRS how much money moved through their system — not how much you earned after costs.

That’s why the number can feel wildly off. It often doesn’t account for things like:

• Platform service fees
• Refunds to customers
• Shipping or other pass-through costs
• Transactions that never really stayed with you

Seeing a number like this can raise an uncomfortable question: Am I about to owe way more than I expected? 

In most cases, the answer is no — but it does mean you need to report it correctly.

A simple three-step plan to help you move forward with clarity

Step 1: Pause and remember this isn’t your final tax bill

A 1099-K is an information form, not a tax-due notice. It doesn’t mean you owe tax on every dollar listed. It simply shows the IRS that payments were processed on your behalf. 

Your tax return is where the full story gets told — including what you actually earned after expenses.

Before doing anything else, remind yourself: this number is a starting point, not a finish line.

Step 2: Separate gross income from your actual net earnings 

Next, gather context. Start by pulling:

• Platform statements and annual summaries
• Fee and commission breakdowns
• Records of refunds and business expenses

This step isn’t about perfect bookkeeping. It’s about understanding the difference between money spent and money kept.

Once you break that big number into pieces — sales, fees, refunds, shipping, supplies — it usually starts to make sense. And the fear tends to fade.

Step 3: Report the correct amount (without overpaying)

This is where clarity turns into confidence — and where having the right tools matters.

Instead of manually sorting everything or second-guessing your numbers, you can use TurboTax Premium to import your 1099-K and walk through the process step by step. The software helps categorize income, account for expenses, and calculate the correct table amount — without spreadsheets, complex math, or guessing what the IRS expects.

If you want expert help, TurboTax Experts for Business matches you with an expert specialized in your situation to help maximize deductions and keep more money in your pocket.