Biden ORDERED It: Will Trump STOP The IRS Targeting “Side Hustles”?

The IRS is tightening its grip on unreported income from side hustles, potentially catching many Americans off guard this tax season.

At a Glance

  • IRS lowering reporting threshold for online income from $20,000 to $5,000
  • New rules affect platforms like eBay, Etsy, Venmo, and Ticketmaster
  • All income, regardless of amount, is taxable unless legally exempt
  • Good recordkeeping is crucial for accurate tax filing
  • Changes take effect for the 2025 tax filing season

IRS Cracks Down on Unreported Side Hustle Income

The Internal Revenue Service is intensifying its efforts to track and tax income from online side hustles, introducing new reporting rules that will affect millions of Americans. Starting in 2024 tax year, individuals earning over $5,000 through platforms like eBay, Etsy, or Ticketmaster will receive a 1099-K form, a significant change from the previous $20,000 threshold.

This is an old Biden rule…let’s see if Trump steps in and does something about it.

This shift underscores the importance of meticulous financial record-keeping and accurate reporting to avoid potential tax-related issues. As the April 15 tax deadline approaches, it’s crucial for those with supplemental online income to understand and comply with these revised regulations.

The IRS has made it clear that all income, regardless of the amount, is taxable unless specifically exempted by law. This applies even if you don’t receive a Form 1099-K. The agency emphasized this point, stating, “Remember that all income, no matter the amount, is taxable unless the law says otherwise – even if you don’t get a Form 1099-K.”

It’s important to note that not all electronic payments are considered taxable income. Money received as gifts, reimbursements, or personal expense repayments is generally not subject to taxation. To avoid confusion, the IRS advises labeling personal transactions on payment apps and websites.

Implications for Side Hustle Entrepreneurs

For those engaged in side hustles or small businesses, the new rules bring both challenges and responsibilities. The IRS has clarified, “Whether someone is having fun with a hobby or running a business, if they are paid through payment apps for goods and services during the year, they may receive an IRS Form 1099-K for those transactions. These payments are taxable income and must be reported on federal tax returns.”

This means that individuals earning $5,000 or more in 2024 from selling goods or services online will receive a 1099-K form, which reports payments from online marketplaces and apps. The change significantly broadens the net of those required to report their online income, potentially affecting millions of Americans who supplement their primary income with side hustles.

As the IRS prepares for the 2025 tax filing season, which runs until April 15, it’s crucial for side hustle entrepreneurs to adapt their financial practices. Good recordkeeping is essential for accurate tax filing and can help avoid discrepancies between reported income and actual earnings.

Remember this new rule!