Did you get a 1099-K? New IRS rules will impact millions of gig workers and freelancers

The 1099-K form, issued by third-party payment apps, reports earnings for gig economy workers. The IRS requires platforms to issue this form to those earning above a certain threshold, recently lowered to $5,000 for the 2024 tax year. Prior to this, only individuals with earnings over $20,000 and 200 transactions received a 1099-K. The threshold will continue to decrease, reaching $600 in future years. The form helps address underreporting of income from third-party payment platforms. While personal payments like gifts are nontaxable, errors may occur on 1099-K forms, which can be corrected on Schedule 1. Starting in 2025, platforms may request taxpayer identification numbers and withhold 24% of payments for those without them. Responsible filing is crucial, as the 1099-K requirements ensure accurate tax reporting and reduce the risk of audits.