Understanding Your 1099
The tax form you may receive depends on how your payments are processed, current federal rules, and any state reporting requirements. Receiving or not receiving a form does not determine whether income is taxable.
Prelaunch: Live host payments have not started. Afto will confirm its final information-reporting workflow before issuing host tax documents.
Federal reporting thresholds for 2026
Two federal information-return rules may be relevant to marketplace payments:
- Form 1099-K: If payments are settled through a third-party settlement organization, the federal filing threshold is more than $20,000 in payments and more than 200 transactions for the calendar year. A payment settlement entity may still issue Form 1099-K below that threshold, and payment-card transactions follow separate reporting rules.
- Form 1099-NEC: If Afto is the payer reporting nonemployee compensation, the federal threshold for payments made in 2026 is $2,000. The threshold may be adjusted for inflation after 2026, and backup-withholding rules can require reporting regardless of amount.
Which form applies depends on the final payment flow and information-reporting classification. Afto will identify the form used before issuing host tax documents. State filing thresholds and form requirements may differ from the federal rules, so a host may receive a form at a lower amount.
The IRS says income from goods or services must generally be reported on your tax return even if you do not receive an information return. A form threshold is a filing rule for the payer or payment settlement entity, not a tax-free allowance for the host.
What counts as reportable earnings
Your host ledger records trip earnings, platform fees, adjustments, and payouts separately. The amount on an information return may not equal your take-home payouts:
- Form 1099-K generally reports gross payment transactions without reducing the amount for fees, refunds, credits, or other adjustments.
- Form 1099-NEC generally reports nonemployee compensation paid to you.
Use the form together with your host ledger and your own records rather than treating any one number as net taxable income.
Reimbursements and pass-through charges
The host business workspace labels paid toll, eligible ticket, documented fuel, and additional-distance reimbursements separately from trip earnings. That ledger classification helps you reconcile the underlying transactions, but it does not by itself determine whether an amount appears on an information return or how it should be treated on your tax return.
Keep the receipts, guest charge records, and Afto ledger entries for these amounts. The applicable form, payment flow, and your circumstances can affect reporting, so ask a qualified tax professional how to reconcile them. See Toll and Ticket Reimbursement for the product workflow.
Afto doesn't provide tax advice
Afto isn't a substitute for a tax professional, and we don't give personalized tax advice. A few things worth raising with your own accountant or tax preparer:
- State and local rental/sales tax — some states apply rental or sales tax obligations to peer-to-peer car-sharing income, separate from federal income tax. Whether this applies to you depends on your state and how you're set up as a host.
- Deductible expenses — mileage, maintenance, depreciation, and other hosting-related costs may be deductible, but the specifics depend on your situation.
- Business structure — if hosting becomes a significant part of your income, a tax professional can advise on whether a different business structure makes sense for you.
Consult a tax professional, especially one familiar with peer-to-peer or gig-platform income, before filing.
Where to find your numbers
The host business workspace shows year-to-date paid trip amounts and reimbursements separately. Compare that ledger with any information return and your bank records before filing. See Getting Paid: Payout Schedule for how the running ledger works.