What’s Changed Under the One, Big, Beautiful Bill
• The reporting threshold for third-party settlement organizations (TPSOs) under Form 1099-K has reverted to $20,000 and more than 200 transactions per year, reversing the lower thresholds enacted previously. (irs.gov) • This applies to tax year 2024 and prior, meaning for payments received this year and earlier. Forms issued in 2025 will reflect the restored threshold. (irs.gov)
Who’s Impacted
| Role | How You’re Affected |
|---|---|
| Individuals selling via marketplace apps or platforms | Fewer people will now receive a Form 1099-K unless gross payments and transaction count cross both thresholds. |
| Small gig-workers, casual sellers | If you sold goods/services below $20,000 or had fewer than 200 transactions, you’ll likely not get a 1099-K—but you still must report income. |
| Payment platforms (TPSOs) | They must revert to original reporting rules; systems need adjusting. |
Tax Planning Strategies You Should Consider
- Keep detailed records. Even if you don’t receive a Form 1099-K, all income from selling goods or services is taxable. Maintain invoices, receipts, and platform statements to support what you report.
- Understand gross versus net amounts. The 1099-K reports gross payments—it doesn’t subtract fees, refunds, shipping. Farmers of costs and refunds before calculating profits.
- Budget for income tax. Without an information return automatically triggering reporting, you might forget income. Estimate and potentially make estimated tax payments.
- Update tax software & platforms. Marketplaces, TPSOs, and accounting tools must adjust to the restored threshold for generating and issuing Forms 1099-K. If they force early issuance or lower thresholds improperly, question it. |
Example Scenarios
- Artisan on Etsy: Sold $18,000 in goods across 150 transactions in 2024. Under the reverted rule, she won’t receive a 1099-K because neither the dollars nor number of transactions meet both thresholds. But she must include that $18,000 as business income. |
- Ride-share driver: Earned $25,000 in fares over 220 rides. Meets both thresholds—expects a Form 1099-K from the ride-share platform. |
- Someone selling online casually: Sold items totaling $22,000 but across just 150 transactions. Won’t trigger Form 1099-K under the restored rule because transaction count too low.
Compliance Takeaways
- Don’t wait for a 1099-K—track and report all income.
- Consult tax professional if you were relying on the lower threshold previously, as deductions and projections may need revising.
- If you’re a platform operator, verify your reporting obligations and thresholds carefully—misreporting can lead to penalties.
In short: while the reversion simplifies things for many small and casual sellers, it doesn’t reduce the obligation—all income still counts. Know where you stand relative to both the $20,000 and 200-transaction test, keep impeccable records, and adjust your tax planning accordingly.