Answer · confidence: strong
How are selling earnings taxed, and at what amount do apps report them?
Research question: How are income from self-employment sales taxed in the US, and at what amounts do payment platforms have to report it?
Self-employment income in the US is subject to a 15.3% tax rate for 2024, which includes a 12.4% Social Security tax and a 2.9% Medicare tax 51213. Individuals must pay this tax and file Schedule SE if their net earnings from self-employment are $400 or more 710. Regarding reporting, the IRS stated in November 2025 that the Form 1099-K threshold reverts to $20,000 under the One, Big Beautiful Bill 1. Previously, the reporting requirements were phased in, requiring reports for payees receiving over $20,000 for more than 200 transactions in 2023 and over $5,000 in 2024 2.
Checked 2026-10-15. Only documented and supported facts are used.
Dig deeper on this questionSources
[1] supported
The IRS said in November 2025 that the Form 1099-K reporting threshold reverts to a $20,000 dollar limit under the One, Big Beautiful Bill.
"IRS Issues FAQs on Form 1099-K threshold under the One, Big Beautiful Bill; dollar limit reverts to $20,000 -- 17-NOV-2025"What changed on www.irs.gov/forms-pubs/about-form-1099-k between 2019-01-09 and 2026-09-27
[2] supported
The IRS phase-in for payment platform reporting (Form 1099-K) set transition years where reporting was not required unless payees received over $20,000 for more than 200 transactions in tax year 2023, and more than $5,000 for tax year 2024.
"IR-2023-221 (Nov. 21, 2023) (describing phase-in transition years where reporting not required unless payees receive over $20,000 for more than 200 transactions in tax year 2023, and more than $5,000 for tax year 2024)"Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications (Consumer Financial Protection Bureau, 2024-12-10)
[3] supported
Payment platforms must report payments made in settlement of payment card and third-party network transactions under 26 U.S.C. 6050W.
"See 26 U.S.C. 6050W (``Returns relating to payments made in settlement of payment card and third party network transactions'')"Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications (Consumer Financial Protection Bureau, 2024-12-10)
[4] supported
A government report estimated that in tax year 2017, three P2P apps alone filed U.S. tax reports at a $20,000 reporting threshold, disclosing nearly $200 billion in payments to businesses.
"One government report estimated that in tax year 2017, three P2P apps alone filed U.S. tax reports (at a reporting threshold of $20,000) disclosing nearly $200 billion in payments to businesses through those platforms."Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications (Consumer Financial Protection Bureau, 2024-12-10)
[5] documented
Self-employment tax in the US consists of Social Security and Medicare taxes, with a total rate of 15.3% for 2024.
"The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance)."Self-employment tax (Social Security and Medicare taxes)
[6] documented
For 2024, the first $168,600 of combined wages, tips, and net earnings is subject to the Social Security portion of self-employment tax.
"For 2024, the first $168,600 of your combined wages, tips, and net earnings is subject to any combination of the social security part of self-employment tax, social security tax, or railroad retirement (tier 1) tax."Self-employment tax (Social Security and Medicare taxes)
[7] documented
Individuals with net earnings from self-employment of $400 or more must pay self-employment tax and file Schedule SE.
"You must pay self-employment tax and file Schedule SE ( Form 1040 ) if either of the following applies. Your net earnings from self-employment (excluding church employee income) were $400 or more."Self-employment tax (Social Security and Medicare taxes)
[8] documented
An additional 0.9% Medicare tax applies if self-employment income exceeds specific thresholds, such as $200,000 for single filers.
"You are liable for an additional 0.9% Medicare Tax if your wages, compensation, or self-employment income (together with that of your spouse if filing a joint return) exceed the threshold amount for your filing status: ... Single $200,000"Self-employment tax (Social Security and Medicare taxes)
[9] documented
Self-employed individuals can deduct the employer-equivalent portion of their self-employment tax when calculating adjusted gross income.
"You can deduct the employer-equivalent portion of your self-employment tax in figuring your adjusted gross income."Self-employment tax (Social Security and Medicare taxes)
[10] documented
Self-employment tax is not owed if net earnings from self-employment are less than $400.
"4 c Combine lines 4a and 4b. If less than $400, stop; you don’t owe self-employment tax."PDF 2026 Schedule SE (Form 1040) - Internal Revenue Service
[11] documented
The maximum amount of combined wages and self-employment earnings subject to the social security tax portion for 2026 is $184,500.
"7 Maximum amount of combined wages and self-employment earnings subject to social security tax or the 6.2% portion of the 7.65% railroad retirement (tier 1) tax for 2026 . . . $184,500"PDF 2026 Schedule SE (Form 1040) - Internal Revenue Service
[12] documented
The social security tax rate applied to self-employment earnings is 12.4%.
"10 Multiply the smaller of line 6 or line 9 by 12.4% (0.124) ."PDF 2026 Schedule SE (Form 1040) - Internal Revenue Service
[13] documented
The Medicare tax rate applied to self-employment earnings is 2.9%.
"11 Multiply line 6 by 2.9% (0.029)"PDF 2026 Schedule SE (Form 1040) - Internal Revenue Service
[14] documented
Taxpayers can deduct one-half of their self-employment tax as an adjustment to income.
"13 Deduction for one-half of self-employment tax. . . Multiply line 12 by 50% (0.50). Enter here and on Schedule 1 (Form 1040), line 15 ."PDF 2026 Schedule SE (Form 1040) - Internal Revenue Service