Core Points - The recent change in IRS policy regarding the 1099-K reporting threshold is a relief for online sellers and freelancers in the U.S. [1] - The new rule states that a Form 1099-K will only be issued if gross payments exceed $20,000 and there are more than 200 transactions on a single platform within the tax year, effective for 2025 taxes [2] - This adjustment is particularly beneficial for individuals with side hustles, as it limits the tax paperwork to those seriously engaged in selling goods or services [3] Changes to 1099-K Rules - The previous "$600 rule" required all taxpayers earning $600 or more on platforms like PayPal, Venmo, or Cash App to complete additional tax forms [5] - To ease the transition, the IRS introduced a $5,000 threshold for 2024 taxes, serving as a phased implementation before the $600 threshold takes effect [5] - The changes have caused confusion in prior tax seasons, with many taxpayers receiving unexpected 1099-K forms [6] Advocacy and Reactions - The National Taxpayers Union Foundation (NTUF) opposed the drastic drop in the reporting threshold, arguing it would lead to confusion and potentially incorrect income reporting [6] - Demian Brady from NTUF described the 1099-K course correction as a significant win for transparency, simplicity, and common sense [7]