1099-K threshold is $5k for tax year 2024, $2.5k for tax year 2025, and $600 for tax year 2026. So if you receive any money through a processor like Paypal from selling secondhand, freelancing, etc. those are the thresholds. - ThreadSky

3dfrost.bsky.social • 15 days ago

1099-K threshold is $5k for tax year 2024, $2.5k for tax year 2025, and $600 for tax year 2026. So if you receive any money through a processor like Paypal from selling secondhand, freelancing, etc. those are the thresholds.

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khadijah.bsky.social•15 days ago

Do we know how this happened?

3dfrost.bsky.social•15 days ago

the $600 threshold was quite sudden so the IRS first delayed it a year, then decided to roll out the lowering of the threshold instead of doing it all at once

khadijah.bsky.social•15 days ago

It is wretched!

3dfrost.bsky.social•15 days ago

The 1099-K just changes exactly which form the income is reported under and is not a change to tax rates/thresholds themselves.

khadijah.bsky.social•15 days ago

OH! Ok thank you!!!

approachcautiously.bsky.social•15 days ago

Kind of fucked up that the amount was halved and yet billionaires and large companies got tax cuts. You know, the people who should be paying the most in taxes 😠

(I'm mad at bad tax laws and not you in case that isn't clear)

3dfrost.bsky.social•15 days ago

1099-K should not impact the amount of taxes someone pays, just changes the form where they report some income. I currently report under hobby income but once the 1099-K threshold drops enough I will switch to that.

approachcautiously.bsky.social•15 days ago

The amount of money that requires you to have the 1099k does affect your taxes seeing as they are decreasing the threshold so much. Before you could make more through PP and not have to pay taxes on it, and next year you can only make $599 and not have to pay taxes which is insane

3dfrost.bsky.social•15 days ago

Self-employment income is taxable starting at $400. If not counted as self-employment, funds still need to be reported as hobby income or misc when filing taxes. This just shifts part of that income to the form 1099-K.

3dfrost.bsky.social•15 days ago

I didn't hit the $5k threshold for Paypal for tax year 2024. That doesn't mean my freelance income isn't taxable; if the IRS audited me and I failed to report that income, I would owe the IRS taxes plus interest.

3dfrost.bsky.social•15 days ago

If I make $2k through Paypal this year, I will not hit the threshold, so I will add it to hobby or misc when filing 2025 taxes. If I make $3k through Paypal this year, I will receive a 1099-K and fill that out instead. It's all taxable; the only difference is the form used to report it.

apocalypsegrrl.bsky.social•15 days ago

📌

3dfrost.bsky.social•15 days ago

since there's some confusion:

1099-K is just a new form for income that should already be reported anyway (like under misc or hobby income, for example). it is not a new tax.

self-employment taxes should be filed starting at $400 income. this has been the case for decades, unrelated to 1099-K.

3dfrost.bsky.social•15 days ago

afaik the intent of the 1099-K is to calculate income/profit, so if you receive one but didn't profit on all transactions (like you resold items at a loss), you may need to recalculate the amount (but will need receipts proving no profit in case the IRS audits you).

elizabethbroadbent.bsky.social•15 days ago

I am SO GRATEFUL for this. As someone who makes some money but not much freelancing (kids are homeschooled), I need to know this.

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