If you make extra cash from gig work or selling stuff online, Trump's tax reporting change just made your life easier

Online sellers and freelancers successful the U.S. person recovered changes to the 1099-K reporting threshold headache-inducing astatine champion implicit the past mates of years, but a caller alteration successful IRS argumentation volition travel arsenic a alleviation to many.

Congress enacted a regularisation to alteration the 1099-K threshold for your 2025 taxes, meaning you should lone person a Form 1099-K if you person much than $20,000 successful gross payments connected third-party networks oregon outgo apps and you besides behaviour much than 200 transactions connected a azygous level wrong the taxation twelvemonth (1).

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This is bully quality for those who person a broadside hustle similar driving Uber oregon casually merchantability items online. The threshold should guarantee that lone those who are earnestly engaged successful selling goods oregon services done a third-party level are liable for the other taxation paperwork, and are likewise taxed appropriately connected their profit.

Here’s the backstory connected the Form 1099-K confusion, and wherefore you tin present remainder casual if you’re looking to marque immoderate casual wealth connected the broadside — without having to interest astir other taxation forms.

Initially, the “$600 rule” statute that changed the requirements for 1099-K forms meant that each taxpayers who earned $600 oregon much connected platforms similar PayPal, Venmo oregon Cash App would person to implicit the further signifier and beryllium taxed connected that income. However, successful an effort to soften the interaction connected some these third-party companies and connected taxpayers, the IRS announced a $5,000 threshold for 2024 taxes — a mode to “phase in” the implementation of the $600 threshold (2).

This caused disorder for galore implicit the past fewer taxation seasons, and galore taxpayers received 1099-K forms they weren’t expecting.

The National Taxpayers Union Foundation (NTUF) lobbied hard against the changes, arguing that a drastic driblet successful the reporting threshold would origin the resulting disorder astir forms and reporting, and could besides trigger taxes for things similar receiving wealth transfers from friends, with taxpayers having to study higher incomes than they truly earned.

“The 1099-K people correction is simply a large triumph for transparency, simplicity and communal sense,” wrote Demian Brady, vice-president of probe astatine NTUF (3).