Here’s what HIVE AI had to say about “What are the rules for reporting side gig income under new 1099-K thresholds?”:

Reporting side gig income under the new 1099-K thresholds

What changed with Form 1099-K thresholds

2024 tax year

• Third-party settlement organizations (payment apps/marketplaces) must issue a 1099-K if your payments for goods or services exceed $5,000 in the calendar year. This was part of the IRS’s phased approach for post‑ARP implementation and is reflected in current IRS publications for 2024. 1

2025 and after (current IRS position)

• In October 2025, the IRS announced that, under the One Big Beautiful Bill, the 1099‑K threshold reverts to the pre‑ARP standard: a 1099‑K is required only if aggregate reportable payments exceed $20,000 and the number of transactions exceeds 200. The IRS issued FAQs confirming this reversion. 2

Earlier phased plan (now superseded)

• Prior IRS webpages described a phased plan: $5,000 (2024), $2,500 (2025), and $600 (2026+). Taxpayers may still see references to this plan online, but the IRS’s October 2025 announcement indicates a reversion to $20,000/200 under the new law. 3

Key rule: report all taxable income, even if you don’t receive a 1099-K

• Side gig earnings are taxable and must be reported regardless of whether you receive a 1099‑K, 1099‑NEC, or no form at all. This applies to part‑time work, services, and sales where you have a gain. 4
• Gig economy income is taxable even if it’s not reported on an information return and even if it’s paid in cash, property, goods, or virtual currency. 5

How to report side gig income on your return

Business income from services or sales (profit motive)

• Report gross receipts on Schedule C and compute net profit; file Schedule SE to calculate self‑employment tax. Use your 1099‑K (if any) as a reconciliation tool to your books—it shows gross, not net. 1

Sales of personal items

• If you sold a personal item at a loss and received an incorrect 1099‑K, follow the 1040 instructions to enter the erroneous amount at the top of Schedule 1 so it doesn’t inflate income. If you sold a personal item at a gain, report the gain on Form 8949 and Schedule D. 6

Asset sales tied to a business

• If you sold an asset used in your business (subject to depreciation), report it on Form 4797. 1

What’s in a 1099-K amount

Gross amounts include platform fees

• For platform payouts, 1099‑K generally reports the gross amount processed, including fees withheld by the platform. Track your actual fees and expenses separately on Schedule C. 7

Interaction with other information returns for side gigs

1099‑NEC/1099‑MISC thresholds are changing

• Separate from 1099‑K, payors who directly pay you for services may issue a 1099‑NEC/1099‑MISC when payments exceed new thresholds. Under the One Big Beautiful Bill, the general 6041 reporting threshold increases from $600 to $2,000 for payments made after December 31, 2025 (and is indexed for inflation after 2026). Backup withholding references and related service‑payment cross‑references were updated accordingly. 8

Practical guidance

Keep clean records and reconcile

• Maintain detailed books showing gross receipts, platform fees, refunds/chargebacks, mileage and other deductible expenses. Use the 1099‑K (if issued) to reconcile to your books; your return should reflect your actual gross and net, not merely the form totals. 1

Don’t treat personal transfers as income

• Personal gifts or reimbursements from friends/family are not taxable and should not be on a 1099‑K; if they appear, work with the platform for a corrected form and follow the 1040 instructions to adjust as needed. 4

Make estimated tax payments if needed

• If your side gig produces a net profit, you may need quarterly estimated payments to cover income tax and self‑employment tax. IRS guidance emphasizes accurate reporting regardless of information returns issued. 4

Context on how we got here

ARP’s $600 change and IRS delays

• ARP originally reduced the 1099‑K threshold to $600 with no transaction minimum, but the IRS delayed implementation for 2022 and 2023 through administrative guidance. 9

IRS planned phase-in for 2024–2026

• The IRS then planned a phased approach—$5,000 (2024), $2,500 (2025), $600 (2026+)—before Congress enacted the One Big Beautiful Bill and the IRS announced a reversion to $20,000/200 for 2025 and later. If you see references to the phased plan, they reflect prior guidance and not the current threshold after the IRS’s October 2025 announcement. 3

If you tell me the platform(s) you use and whether you sell goods, perform services, or both, I can map your exact reporting lines on the 1040 and help you set up an estimated tax schedule.

Sources

1 – IRS – Publication 525 Taxable and Nontaxable Income 📄 Summarize
2 – IRS Newsroom – IR-2025-107 📄 Summarize
3 – IRS.gov – Understanding your Form 1099-K 📄 Summarize
4 – IRS Newsroom – IR-2022-189 📄 Summarize
5 – IRS Newsroom – IR-2022-45 📄 Summarize
6 – IRS.gov – 1040 (2024) 📄 Summarize
7 – PLR 201719009 📄 Summarize
8 – One Big Beautiful Bill Act Sec. 70433. Increase in threshold for requiring information reporting with respect to certain payees 📄 Summarize
9 – Notice 2023-74 📄 Summarize

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