Shopify 1099-K: Filing Requirements and Steps

Operating a Shopify store to sell products and earn money can be a rewarding career. Yet, there is a lot for store owners to know when it comes to filing their income tax return. You need to report income from your online store, monitor transaction fees, and compile your total expenses. 

So what are the rules for reporting and paying tax, or if you use third party payment networks? What about specific Shopify tax forms or Shopify tax documents? 

Read on to learn everything you need to know about Shopify taxes and filing your 1099-K tax form.

Key Takeaways

• Shopify will send you a 1099-K directly, and also file it to the IRS on your behalf, if you earned over $5,000 in 2024. 
• If you don’t receive your form, you can contact Shopify directly to ask them to send you one. 
• If you need a little extra assistance with Shopify reports or handling tax details and expenses, try an online accounting software like FreshBooks.

Table of Contents

• Why Is Shopify 1099-K Important?
• Criteria for Receiving a 1099-K Form
• How to File Taxes with Shopify 1099-K Form
• Shopify 1099-K Requirements
• How to Get the 1099-K Form from Shopify
• FAQs on Shopify 1099-K Tax Form

Why Is Shopify 1099-K Important?

The Shopify 1099-K is important because it details the total revenue you brought in with Shopify Payments the previous year. Shopify submits this form to the IRS on your behalf, and sends a matching 1099-K copy to you as a seller by January 31st each year. 

You can use this form to calculate your yearly gross income when filing your federal and state income tax returns. Any necessary changes can be retroactively applied to the date of the request.

The 1099-K helps ensure compliance with IRS regulations and simplifies income tracking for self-employed individuals. Note that the 1099-K issued by Shopify only accounts for transactions that have been processed by Shopify Payments, meaning if you have more than one online shop or earn other income from gift cards, debit cards, or credit cards, you’ll need to report these earnings separately.

Criteria for Receiving a 1099-K Form

The criteria you need to meet to receive a Form 1099-K are as follows:

• For years before (and including) 2023, you must have had more than 200 transactions and earned more than $20,000 in gross payments during the calendar year.
• In 2024, the thresholds for eligibility changed. For the calendar year 2024, you qualify for 1099-K reporting if you processed any number of transactions and gross payments totaling more than $5,000 through your account.
• For the 2025 tax year, the reporting threshold for third-party organizations like Shopify will have to send a Form 1099-K if you earn $2,500.
• In 2026 and after, the threshold will be even lower, at $600.
• You satisfy your state’s individual tax threshold requirements.

The US tax year generally runs from January 1st to December 31st. If you meet the above-described criteria for the tax year, Shopify is legally required to send you a Form 1099-K. 

1099-K Form Availability

Shopify emails the account owner when the 1099-K is ready. You can log in and access your form for the previous year in the Shopify admin section under “Finance”. It’s typically available between January 31st and February 28th, although there have been delays in the past with approved IRS extensions granted to the company.

How to File Taxes with Shopify 1099-K Form

When you sell on Shopify, you have to pay income taxes. Shopify collects your taxpayer information when you set up your store, like your Social Security Number (SSN) or Employer Identification Number (EIN). The company will report your earnings to the IRS using this information.

You’ll also report these earnings to the IRS once Shopify sends you your copy. 

1099-K form reports total gross payments, with no adjustment for credits, refunds, fees, or shipping. You should maintain records of your selling expenses to claim them on Schedule C (Form 1040) to offset your gross income.

The income you earn should be reported on Schedule C of your individual income tax return, along with any other business income you’ve earned and any expenses you qualify for to determine your profit or loss.

Even if you don’t earn the required amount to qualify for a 1099-K, you must still report your earnings to the IRS. All your transactions are available in your dashboard, making it easy to see your gross annual income. 

If you need help navigating your expenses and taxes, try FreshBooks accounting software. This powerful cloud-based solution makes it easy to reconcile your Shopify gross receipts, track payments and tax information, and stay organized.

Shopify 1099-K Requirements

Sales tax and income tax are the tax categories that Shopify sellers need to be aware of. Sales tax is a tax levied on purchased goods. It takes on different forms worldwide, such as VAT and GST, so if you sell domestically and abroad, you’ll need to look into all applicable requirements, as you are responsible for collecting sales tax from your customers and remitting it to the state. Shopify does not file or remit sales taxes on your behalf.

Other forms you’ll need to be aware of besides the Shopify 1099 form include:

• A Schedule C form, which is where you report all of your expenses and gross business income
• A Schedule SE form, where all your self-employment taxes are calculated
• 1040 tax form, where you report relevant taxable income and calculate your taxes

To fill out the Schedule C form, you must include all of your income, and you can include all of your other business expenses as well as your cost of goods sold (COGS).

How to Get the 1099-K Form from Shopify

There are two ways to get your 1099-K form from Shopify:

1. Email

If you meet the requirements outlined above, then you can ask Shopify to email you a copy of the form before January 31.

2. Shopify dashboard

Go to your Shopify account and log in using your account details. Once you are logged in, you can navigate to the Payment section, click “Documents”, and you’ll see your 1099-K form listed there. 

Even if you earn less than $5,000, you can still see your transaction history and total sales, which will allow you to file your taxes properly.

Make Your Shopify 1099-K Reporting Hassle-Free with FreshBooks

FreshBooks helps Shopify sellers manage their 1099-K tax reporting, helping small business owners and entrepreneurs stay on top of their taxes with automated expense tracking, income reporting, and tax-ready financial statements. Using this helpful expense tracking software, you’ll feel confident at tax time, knowing your records are tax compliant and organized.

Want to learn more about how FreshBooks can simplify your life as a Stax-compliant? Try FreshBooks for free today, or sign up now and see how easy it can be to run a successful small business and stay tax compliant.

FAQs on Shopify 1099-K Tax Form

Does Shopify send you a 1099-K Form?

Yes, Shopify will automatically send you your 1099-K form if you earned over $5,000 in 2024, regardless of the number of transactions. You can also request one or download it directly from your Shopify dashboard for your record-keeping. 

Where do I find my 1099-K Form on Shopify? 

Once you log in to your Shopify account, you can access Form 1099-K by clicking on the Documents tab. In there, you will find the relevant information you need. 

Does Shopify include PayPal?

One of Shopify’s default payment processors is PayPal. You receive a PayPal Express Checkout account as soon as you launch a Shopify store, and it is connected to the email address you used to register.

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