Trump Hasn’t Blocked New IRS Law That Targets Side Hustles: What To Know

The IRS is set to implement new tax regulations for online side hustles, potentially impacting millions of Americans who earn extra income through digital platforms.

Here’s what you need to know about the Biden-era rule.

At a Glance

  • Starting in 2024, those earning over $5,000 from platforms like Etsy, eBay, or Venmo will receive a 1099-K form
  • This is a significant change from the previous $20,000 threshold
  • All income from side hustles and online sales is considered taxable
  • The IRS is cracking down on unreported income from side hustles
  • Good recordkeeping is essential for accurate tax filing

New Reporting Requirements for Online Earnings

The Internal Revenue Service (IRS) is adapting to the digital economy (and targeting you!) by implementing updated tax regulations that will affect many Americans engaged in online side hustles. Starting in 2024, individuals earning more than $5,000 from platforms such as Etsy, eBay, or Venmo will receive a 1099-K form, marking a significant shift from the previous $20,000 threshold.

After the Biden administration forced millions of Americans to find second incomes, their pre-Trump rules are targeting the people whose lives they ruined.

This change underscores the IRS’s focus on ensuring all income is properly reported and taxed, regardless of its source. The new regulations are part of a broader effort to crack down on unreported income from side hustles, which have become increasingly popular in recent years.

The IRS has made it clear that all income, regardless of the amount, is taxable unless specifically exempted by law. This applies even if an individual does not receive a Form 1099-K. According to the IRS, “If you get paid electronically for a side hustle, small business or selling things online, you may need to pay taxes.”

It’s important to note that not all money received through digital platforms is considered taxable income. Gifts, reimbursements, and personal expense repayments are generally not subject to taxation. To avoid confusion, the IRS advises users to clearly label personal transactions on apps and websites.

Preparing for the New Regulations

As the IRS prepares for the 2025 tax filing season, which runs until April 15, individuals involved in online sales or services must be attentive to these developments. Good recordkeeping is essential for accurate tax filing and can help prevent issues down the line.

“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,” the IRS stated.

For those who may be affected by these changes, it’s advisable to start preparing now. This includes keeping detailed records of all income and expenses related to side hustles, understanding which transactions are taxable, and considering consulting with a tax professional to ensure compliance with the new regulations.

As these new regulations may be complex for some taxpayers, the IRS has provided resources for those seeking more information. Individuals with questions or issues related to Form 1099-K are encouraged to visit IRS.gov/1099k for detailed guidance and updates.