If you sell items on eBay, drive for Uber or your business accept credit or debit cards, you will probably receive a Form 1099-K.
For individuals, Form 1099-K reports payments to their trade or business.
The income for sole-proprietors is reported on Form 1040 Schedule C as gross receipts with profits subject to the self-employment tax.
For example, you received a Form 1099-K for $40,000 with business expenses of $16,000, which left you with a profit of $24,000. If you are filing as Single and have no other income, your federal tax liability would be approximately $4,200. Additional business expenses beyond $16,000 would reduce your tax liability.