#575
Side Hustles Meet the Taxman
Published:
Jan 25, 2025
Author:
Sarah Parsons Wolter
Share:
Selling online isn’t just a hobby anymore – at least not in the eyes of the IRS. With the agency lowering the reporting threshold for 1099-K forms to $5,000, millions of sellers on platforms like Etsy, eBay, and StubHub will now receive tax forms they may not have expected. Whether you're flipping concert tickets or selling handmade crafts, the IRS wants its share and is taking a phased approach to ensure compliance. The threshold will drop to $2,500 in 2025 and ultimately to $600 in 2026, making even small-time sellers part of the tax equation. What used to be a fun way to declutter your garage is now officially taxable income.
The IRS is expected to use audits and "soft letters" to crack down on unreported earnings. Investigations are already underway, with JustAnswer experts under scrutiny – one individual is suspected to have raked in over $1.3 million in unreported income by answering more than 86,000 questions.
The agency is also facing changes at the top, as IRS Commissioner Danny Werfel recently announced his resignation. With the possibility of hiring freezes under the new administration, questions remain about the future of enforcement efforts. But don’t count them out just yet – the IRS still has plenty of resources to ensure no online sale goes unnoticed. Whether you're selling vintage sneakers or used electronics, it might be time to start thinking like a small business owner – because the IRS already considers you one.
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Side Hustles Meet the Taxman
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