I use Venmo and PayPal for side work — will I receive a Form 1099-K for 2025, and do I owe taxes?

The threshold for receiving a Form 1099-K from payment platforms like Venmo, PayPal, Cash App, and Stripe was permanently restored by the One, Big, Beautiful Bill Act (OBBBA) to its historical level for 2025: you will receive a Form 1099-K only if both of the following are true:

• Your total payments for goods and services exceed $20,000, AND
• You had more than 200 separate transactions

Both thresholds must be met — exceeding just one does not trigger a 1099-K.

### Background: Why Did This Change?

The American Rescue Plan Act of 2021 had lowered the reporting threshold to just $600 in total payments (with no transaction count requirement), effective 2022. The IRS repeatedly delayed enforcement, and the OBBBA ultimately repealed that $600 rule entirely, restoring the pre-2022 $20,000/200-transaction standard for 2025 and beyond.

### What Counts as "Goods and Services"?

Platforms like Venmo and PayPal distinguish between:

• Personal (Friends and Family) payments: Splitting dinner, reimbursing rent — these are NOT reported on Form 1099-K and are not taxable income.
• Business payments (Goods and Services toggle): Payments you receive for selling items, freelance work, or any commercial activity — these ARE counted toward the 1099-K threshold.

If a buyer uses the "Goods and Services" toggle on Venmo or PayPal, that payment is tracked.

### Do I Still Owe Taxes Even Without a 1099-K?

Yes. The Form 1099-K threshold only determines whether the platform sends you a form. Your obligation to report and pay taxes on self-employment income exists regardless of whether you receive a 1099-K.

• Freelance/side gig income is taxable as self-employment income on Schedule C.
• If your net self-employment income exceeds $400, you must file and pay self-employment tax (15.3%) in addition to ordinary income tax.
• If you expect to owe $1,000 or more in taxes for the year, you should be making quarterly estimated tax payments (due April 15, June 16, September 15, and January 15).

### Selling Personal Items

If you sell personal items for less than what you originally paid (i.e., at a loss), the proceeds are generally not taxable — you are not required to report a gain. However, you should keep records of the original purchase prices in case the IRS has questions. Items sold at a profit (above your original cost) are taxable capital gains.

For complete rules, see IRS Publication 5764 and the Form 1099-K FAQ on IRS.gov.