Heads up if you’re a freelancer or small business owner: The IRS may need something new from you

Heads up to anyone who is a freelancer, independent contractor, business owner, property renter or just a hobbyist who occasionally sells their creations: If you accept business-related income through a payment app or online marketplace like Venmo, CashApp, Airbnb and Etsy, come January you may start receiving 1099-K tax forms from the platforms where you do business.

Heads up to anyone who is a freelancer, independent contractor, business owner, property renter or just a hobbyist who occasionally sells their creations: If you accept business-related income through a payment app or online marketplace like Venmo, CashApp, Airbnb and Etsy, come January you may start receiving 1099-K tax forms from the platforms where you do business. You may get more of them than you’re used to receiving — especially if you’ve never received one from the platforms before. And you’ll be getting even more in 2025 and beyond. Here’s why and what you need to know before you file your 2024 taxes next year. A rule change that greatly increases the reporting responsibility of third-party payment platforms to issue 1099-Ks to users was supposed to go into effect in 2021. But the IRS postponed implementation for 2021 through 2023, and it has decided to only partially implement it for 2024 and 2025. The original rule required a third-party platform to send you a 1099-K if you had more than 200 business transactions in a given year on the platform, and only if those transactions combined added up to more than $20,000. Translation: Not that many people were affected. The rule change will affect far more people, however, because it both eliminates the number-of-transactions threshold and drastically lowers the dollar-limit threshold to more than $600 for all transactions combined. The IRS has estimated that change could result in “44 million Forms 1099-K (being) sent to many taxpayers who wouldn’t expect one.”