Quick Answer
StubHub will send a 1099-K form to sellers who have over 200 transactions and $20,000 in gross sales within a calendar year. This applies to both individual and business sellers on StubHub. The 1099-K reports your gross transaction amounts to the IRS so your StubHub sales can be properly taxed.
What is a 1099-K?
A 1099-K is an informational tax form that is sent to people who make money through third-party payment platforms. It reports the gross sales amounts paid to a recipient over the course of a tax year.
1099-K forms are issued by payment settlement entities such as StubHub when both of the following criteria are met:
- The total number of transactions exceeds 200.
- The gross amount of payments exceeds $20,000.
So in short, if you have over 200 sales and make more than $20,000 in gross StubHub sales within a single calendar year, you can expect to receive a 1099-K reporting your gross sales amounts.
Why does StubHub issue 1099-K forms?
Third-party payment platforms like StubHub are required by law to report gross sales amounts to both the IRS and the seller. This allows the IRS to verify that the appropriate taxes are being paid on sales income.
Without the 1099-K, many small sellers could easily fail to properly report their StubHub earnings. The 1099-K provides transparency to the tax authorities and helps sellers comply with tax laws.
When will I receive my 1099-K from StubHub?
StubHub will mail 1099-K forms by January 31st for the previous tax year’s sales activity.
For example, if you met the 200 transaction and $20,000 gross sales thresholds at any point in 2022, StubHub will send you a 1099-K by January 31, 2023 that covers your gross 2022 StubHub sales.
Do I have to pay taxes on my StubHub sales?
Yes, your StubHub sales are considered taxable income, so you are required to report the income and pay any taxes owed. Here are some key points on StubHub taxes:
- You must report your gross StubHub sales as income. StubHub will report your gross sales (before their fees) on the 1099-K.
- You can deduct any fees, shipping costs, or other eligible business expenses. This allows you to reduce your taxable income.
- How much tax you owe will depend on your total annual income and deductions, not just StubHub sales.
- Both individual sellers and businesses must report StubHub earnings to the IRS.
So in summary, your StubHub 1099-K shows the income you must report, but you don’t necessarily have to pay taxes on the entire gross amount. Work with a tax professional to properly report your StubHub income and expenses.
Do I need to report sales under $20,000 and 200 transactions?
If you stay under both the $20,000 gross sales and 200 transaction thresholds in a tax year, StubHub will not send you a 1099-K.
However, you are still required to report your StubHub earnings as taxable income even without receiving a 1099-K. The IRS expects you to voluntarily report all taxable income, even relatively small amounts.
So you should still track your StubHub sales and report that income on your tax return. Include a Schedule C and Form 1040 with your individual tax return. The IRS may flag returns that appear too low compared to your bank deposits.
How will the IRS know if I don’t report my income?
The IRS has sophisticated processes for matching tax returns against information returns like 1099-Ks and financial records. So while you may not receive a 1099-K from StubHub, here are some ways the IRS can potentially detect unreported StubHub income:
- Matching bank deposits against income reported.
- Comparing balances reported on Schedules C versus prior years.
- Analyzing large Venmo, PayPal, or other third-party payments.
- Following up on information received from StubHub on sub-threshold sellers.
Failing to report StubHub or other income can lead to tax bills, penalties, interest, and audit risks down the road. It’s always safest to voluntarily report all taxable income, even without a 1099-K.
Do I need to issue 1099-Ks to buyers?
As a StubHub seller, you do not need to issue any 1099-K forms to buyers or users of StubHub’s services. The obligation to issue 1099-Ks is solely on the third-party settlement organization (StubHub).
Even if you process over $600 in payments to any user within a calendar year – the typical 1099 reporting threshold – you have no 1099 filing requirements as a StubHub seller. StubHub’s role means you are exempted from these issuer requirements.
How do I record 1099-K income in my business accounts?
If you operate StubHub sales as a formal business, you should record your 1099-K income in your bookkeeping system. Here are some tips:
- Set up a separate income account called “Gross Sales – StubHub” or similar.
- When you receive your 1099-K, record the full gross amount as income to this account.
- Record any allowable business deductions in their proper accounts.
- The net income after deductions is your taxable StubHub profit.
This method properly captures your gross sales reported on 1099-Ks, while also allowing you to reduce taxable income through any eligible business expenses. Consult with your accountant to determine the optimal bookkeeping method.
Example StubHub 1099-K Accounting Entry
- Gross StubHub Sales Reported on 1099-K: $45,000
- StubHub Fees Paid: $4,500
- Shipping & Materials: $1,000
Account | Debit | Credit |
Gross Sales – StubHub | $45,000 | |
StubHub Fees | $4,500 | |
Shipping & Materials | $1,000 |
This captures the $45,000 gross income reported on the 1099-K, while also recording eligible business deductions that can reduce taxable income. Consult an accountant to ensure proper accounting treatment.
Can I get a 1099-K if I resell tickets without using StubHub?
If you sell tickets independently without using a platform like StubHub, you will not receive any 1099-K reporting your sales. This applies whether you sell locally or online independently.
That’s because the 1099-K requirements apply specifically to third-party payment settlement entities. If buyers pay you directly, you do not meet the criteria for 1099-K reporting.
However, you are still required to voluntarily report your income from independent ticket resales and pay any applicable taxes. Keep careful records of your gross sales and expenses. The lack of 1099-K reporting does not exempt you from paying taxes.
How should I report independent ticket resales?
To properly report income from ticket resales not on StubHub, you can:
- Track income through bookkeeping software or spreadsheets.
- Save documentation of payments received.
- Deduct related expenses.
- Report net income on Schedule C and personal/business tax returns.
- Pay estimated quarterly taxes to avoid underpayment penalties.
Lack of 1099-K reporting shifts the burden of documentation and voluntary tax reporting to you. But the IRS still expects you to pay taxes on this income. Keep thorough records and report as you would W-2 or 1099-reported income.
How can I reduce my taxable income from StubHub sales?
While you must report your full gross sales from StubHub on your 1099-K, you have options to reduce your taxable income and minimize how much tax you owe:
- Deduct related business expenses
- Use a standard mileage rate for vehicle deductions
- Deduct travel, internet, fees, supplies, etc.
- Claim a home office deduction if eligible
- Make retirement plan contributions if a business
- Take advantage of other small business tax deductions
Work closely with a tax professional to identify all allowable deductions you can take against your StubHub sales each year. Legitimate deductions can lead to substantial tax savings.
Example to Reduce $20,000 of StubHub 1099-K Income
- Gross Income: $20,000
- StubHub Fees: $2,000
- Supplies & Materials: $1,000
- Mileage for Ticket Pickup/Delivery: $1,500
- Home Office Deduction: $500
- Cell Phone (50% Business Use): $300
Total Deductions: $5,300
Taxable Income After Deductions: $14,700
Properly claiming eligible business deductions reduced taxable income in this example by over 25%. A tax professional can help maximize write-offs.
What if I have sales from multiple platforms?
If you resell tickets through multiple platforms like StubHub, VividSeats, Ticketmaster, and more, here are some key points:
- You may receive 1099-Ks from multiple platforms.
- Total all gross sales from all platforms to determine if over $20,000.
- Report income from all platforms on your Schedule C.
- Take deductions for combined business expenses.
- You won’t necessarily pay tax on the full combined gross amounts.
The IRS doesn’t care if you use one or multiple platforms. You must report your income from all sources. But legitimate combined business expenses can still substantially lower your taxable income across all platforms.
Example Multi-Platform 1099-K Scenario
- StubHub Gross Income: $15,000
- VividSeats Gross Income: $10,000
- Total Gross Income: $25,000
- Total Expenses: $7,500
You would report the full $25,000 gross income across the two platforms. But you can deduct the $7,500 in combined eligible expenses.
Taxable Income after Deductions: $17,500
Consult a tax pro to ensure proper reporting across multiple platforms and maximize deductions.
Should I create a business entity for selling on StubHub?
If your StubHub sales volume is high, creating a formal business entity can provide some potential tax benefits:
- Take tax deductions as a business rather than limited individual deductions.
- Additional retirement planning options like solo 401(k) plans.
- Possibility to take the 20% qualified business income (QBI) deduction.
- Avoid double taxation of Social Security and Medicare taxes.
- Build business credit to improve future borrowing chances.
Popular entities like LLCs and S-corps can be appropriate for high StubHub sellers. Consult your tax professional to determine if forming a business makes sense. The optimal entity will depend on your specific situation.
Key Factors to Consider
Forming a business for StubHub sales involves tradeoffs. Consider factors like:
- Your expected sales volume each year.
- Your tax situation and savings opportunities.
- Admin costs and tax complexity of operating a business.
- Your other income sources and ability to take QBI deductions.
- Whether you sell on other platforms beyond StubHub.
Analyze these factors with a tax professional when deciding if forming a business is beneficial for your situation. An entity like an LLC can provide tax advantages but also creates additional obligations.
Conclusion
In summary, you can expect a 1099-K from StubHub if you exceed 200 transactions and $20,000 in gross sales within a calendar year. This form reports your gross sales income to the IRS so taxes can be properly paid.
Even without receiving a 1099-K, you are still required to voluntarily report your StubHub earnings as taxable income. Good recordkeeping is key.
Work with a tax professional to maximize business deductions and reduce your taxable income from StubHub sales. Take advantage of all eligible write-offs.
If your StubHub sales volume is high, explore forming a formal business entity. This can provide potential tax savings for high net income StubHub sellers.
Be sure to report income from all platforms and sources to avoid IRS issues. Paying taxes on reselling income is required, but deductions can help minimize how much you owe. Consult an accountant or tax advisor for personalized guidance on reporting StubHub sales.