George Kamel This New IRS Rule Affects Millions: Are You One of Them?
May 26, 2025
New IRS rules are shaking up the tax landscape, especially for side hustlers. Individuals earning over $600 from payment platforms now face stricter reporting requirements. This change encourages gig workers to keep accurate income records to avoid future tax headaches. With the threshold dropping to $600 in 2027, itâs crucial to understand your tax obligations and explore deductions. Tune in for practical tips on managing your side hustle finances effectively and staying ahead of these shifts.
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IRS Lowers 1099-K Threshold
- The IRS lowered the 1099-K filing threshold from $20,000 and 200 transactions to just $600 to catch more side hustle income.
- This targets business activity, not casual sales like selling personal items or receiving gifts.
IRS Targets Tax Gap
- The IRS aims to close the tax gap by tracking more side hustle income through expanded reporting.
- This is not a new tax; it just creates a bigger paper trail for income already required to be reported.
Phased IRS Reporting Rollout
- The IRS is phasing in the new $600 1099-K threshold gradually over three years from 2025 to 2027.
- Each year lowers the earnings trigger from $5,000 to $2,500 and finally to $600 in 2027.