When Does Fiverr Report Your Income to the IRS?

Fiverr and other platforms for freelancers have become a source of income for many individuals. A common concern for sellers on these platforms is understanding their U.S. tax reporting obligations. This guide provides a focused look at how and when Fiverr reports seller income to the IRS.

Fiverr’s IRS Reporting Thresholds

Fiverr, as a third-party settlement organization (TPSO), is required to report payments to the IRS when certain thresholds are met. For the 2024 tax year, the federal requirement is that a Form 1099-K is issued if a seller receives payments over $5,000. For the 2025 tax year, this threshold is scheduled to decrease to $2,500.

The IRS has been in a multi-year transition period regarding these reporting rules. A provision in the American Rescue Plan Act of 2021 aimed to lower the threshold to $600, but its implementation has been repeatedly delayed. The current plan is for this $600 threshold to take effect for the 2026 tax year and beyond.

It is also important for sellers to be aware of state-specific reporting requirements. Some states have established their own, lower reporting thresholds for payment settlement entities. This means a seller might receive a Form 1099-K from Fiverr for state tax purposes even if they do not meet the federal threshold for that year.

Required Taxpayer Information for Fiverr

To comply with U.S. tax laws, Fiverr must collect specific taxpayer information from its sellers. This is done through a Form W-9, “Request for Taxpayer Identification Number and Certification.” Sellers are prompted by Fiverr to complete this digital form, especially as their earnings approach the reporting thresholds.

The Form W-9 requires you to provide your legal name, address, and a Taxpayer Identification Number (TIN). For individual freelancers, the TIN is your Social Security Number (SSN). If you have structured your freelance work as a business entity, such as an LLC, you would provide your Employer Identification Number (EIN).

If the information is not submitted, Fiverr may be required by the IRS to implement backup withholding. This means the platform would have to withhold a percentage of your gross earnings (currently at a rate of 24%) and remit it directly to the IRS. This is not an additional tax but an advance payment to ensure tax compliance.

Understanding Your Form 1099-K from Fiverr

If you meet the reporting thresholds, Fiverr will make a Form 1099-K, “Payment Card and Third Party Network Transactions,” available to you. This form is sent to both you and the IRS. You can access and download the form directly from your Fiverr account dashboard by the end of January following the tax year.

The figure on the Form 1099-K is found in Box 1a, “Gross amount of payment card/third party network transactions.” This number represents the total gross amount of all payments processed on your behalf by Fiverr for the calendar year. It is the sum of all payments from buyers for your services before any fees or deductions are taken out.

The amount in Box 1a includes Fiverr’s service and commission fees. This means the figure on the form is higher than the actual amount deposited into your bank account. This is because the IRS requires the reporting of the gross transaction amount. You will account for the difference by deducting these fees as business expenses on your tax return.

Reporting Fiverr Income on Your Tax Return

Your responsibility to report income is independent of receiving a Form 1099-K. All income you earn through Fiverr is considered taxable and must be reported on your federal income tax return. The Form 1099-K serves as an informational document that helps both you and the IRS track payments, but the absence of the form does not mean the income is not taxable.

Freelance income from Fiverr is reported on Schedule C, “Profit or Loss from Business (Sole Proprietorship).” If you received a Form 1099-K, the amount from Box 1a is your starting point for gross receipts.

From your gross income, you can deduct ordinary and necessary business expenses to determine your net, taxable profit. The primary deduction for many Fiverr sellers is the fees paid to the platform itself. Other common deductions include:

• Costs for software
• Internet service
• Home office expenses
• Any other costs directly related to your freelance work

Accurate record-keeping throughout the year is important for substantiating these deductions.