Form 1099-K and Section 179: IRS Numbers for Shirt Shops

For 2026 sales, a payment app or online marketplace such as Etsy or PayPal has to send a seller a Form 1099-K only when payments for goods or services total more than $20,000 in more than 200 transactions, according to the IRS. Card processors have no threshold at all. Separately, the IRS announced on Nov. 5, 2026 that the Section 179 expensing limit for tax year 2027 rises to $2,640,000. Both numbers come up every January in shirt shops, so here is what the IRS has published, in plain terms. This is a summary of IRS pages, not tax advice. A CPA or enrolled agent should make the call on any specific return.

Form 1099-K: who sends one and when

The IRS describes Form 1099-K as a report of payments received for goods or services from two kinds of payers:

Source: IRS, "Understanding your Form 1099-K," last reviewed Nov. 13, 2026.

The IRS lists craft or maker marketplaces, online community marketplaces, auction sites, crowdfunding platforms, and payment apps among the platforms that report. A shop that sells on Etsy, takes Venmo or PayPal at markets, and runs a card reader at events could receive more than one 1099-K, one from each platform that crosses its reporting rule.

Three points the IRS makes clearly

1. A platform may send a form below the threshold. The IRS says a payment app or marketplace "may send you a Form 1099-K with lower amounts and/or transactions." Getting a form at $8,000 in sales is not an error by itself.
2. The threshold is about reporting, not about tax. The IRS says that whether or not a 1099-K arrives, all income from selling goods or services has to be reported on the tax return.
3. Personal payments are not business income. Money from friends and family for a shared meal, a gift, or a repaid bill should not be reported on a 1099-K. The IRS suggests marking those payments as non-business in the payment app when possible.

What a shirt shop should pull together in January

• Each 1099-K received, matched to the platform's own sales report for the year
• Platform fees, refunds, and shipping labels bought through the platform, since the 1099-K reports gross payments and does not net those out
• Card reader totals from markets and pop-up events
• Cash and check sales, which no platform reports but which are still income

Section 179: the 2027 limit

Section 179 lets a business expense the cost of qualifying property instead of depreciating it over several years, within limits the IRS adjusts for inflation every year. In IR-2026-133, dated Nov. 5, 2026, the IRS published the tax year 2027 figures:

The full details are in Revenue Procedure 2026-35. The IRS release does not list the 2027 phase-out threshold, so it is not repeated here.

What this means for a small shop

The dollar limit is far above what a typical DTF or heat press shop spends in a year. A printer, shaker, heat press, or cutter costs in the thousands, not millions, so the cap itself rarely matters to a small shop. What matters is whether a given purchase qualifies, which year it counts in (tax years follow when property is placed in service, so the 2027 figure applies to tax year 2027, not to a purchase in December 2026), and how it interacts with the shop's income. Those are questions for a tax professional, and the answers differ by business structure.

For the business side of a big equipment decision, the buy a DTF printer or order transfers comparison and the dual station heat press guide cover the payback math before taxes come into it.

Related guides

• How to sell t-shirts on Etsy covers Etsy fees, which matter when matching a 1099-K to actual net sales.
• Etsy's Share & Save holiday promotion refunds part of the transaction fee on some orders, another line to track in the year-end numbers.
• Starting a custom t-shirt business and the DTF business startup guide cover recordkeeping from day one.
• Print-on-demand platforms compared for shops that sell through several platforms.

FAQ

What is the 1099-K threshold for Etsy sellers for 2026?

The IRS says a payment app or online marketplace must send a Form 1099-K when a seller's payments for goods or services total over $20,000 in more than 200 transactions. The platform may still send one for lower amounts. All business income has to be reported either way.

Do card readers have a 1099-K threshold?

No. The IRS says that if customers pay a business directly by credit, debit, or gift card, the payment card processor sends a Form 1099-K no matter how many payments there were or how much they totaled.

When will 1099-K forms for 2026 arrive?

The IRS says payment card companies, payment apps, and online marketplaces must send the seller's copy of Form 1099-K by January 31. A seller who expects one and has not received it should check the platform's tax documents page before contacting the platform.

What is the Section 179 limit for 2027?

The IRS announced in IR-2026-133 on Nov. 5, 2026 that taxpayers can expense up to $2,640,000 of Section 179 property for tax year 2027, up from $2,560,000 for tax year 2026. Details are in Revenue Procedure 2026-35.

Can a shirt shop write off a heat press or DTF printer under Section 179?

Whether a specific purchase qualifies depends on the property, when it is placed in service, the business structure, and the shop's income. The IRS publishes the limits, not a list of approved equipment, so that decision belongs with a CPA or enrolled agent who knows the shop's full return.