If you freelance, side hustle or sell products online, you're most likely familiar with the Form 1099-K. It's a form that specifically reports card payments and transactions from online platforms, apps or payment card processors. The 1099-K rules have changed a few times throughout the years, and they're changing again for 2025 and beyond. So if you get paid through apps like PayPal, Venmo or marketplaces like eBay or Etsy, this is something you'll want to pay attention to.
The Threshold Is Back to $20,000 and 200 Transactions
The IRS has been revising 1099-K reporting rules for a few years now. In 2024, the threshold was lowered to $5,000 in payments and no minimum number of transactions. That meant a lot more freelancers and sellers received the 1099-K form in their mailboxes. The IRS then announced further drops to $2,500 for 2025 and eventually $600 for 2026, both with no transaction minimum.
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But because of the One Big Beautiful Bill Act, things are rolling back again. For the 2025 tax year and beyond, the threshold is back to the old standard of $20,000 in payments and at least 200 transactions. This means that unless you hit both of those numbers, you won't automatically get a 1099-K.
How to Handle 1099-K Changes
The 1099-K rules are changing again, and rolling the threshold back to $20,000 and 200 transactions means most small freelancers and sellers won't see a form in the mail. That said, you still need to report what you earn, so make sure to keep clean records and separate your business and personal money so you'll feel less stressed when it comes tax season.
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Here's what you can do now to streamline your tax prep:
- Separate your accounts: Having a business account makes it way easier to sort taxable income from your personal transactions. It'll also protect your personal assets from business liability.
- Still report your income: Whether you get a 1099-K or not, you still have to report your income on your tax return.
- Use tools or work with a CPA: A tax software like TurboTax or a CPA can help you stay compliant and avoid any delays and penalties.
- Check for mistakes: If you notice any discrepancies or issues with your 1099-K form, you'd want to contact the filer. Their contact information is typically in the upper left corner of the form.
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