If you drive for Uber, deliver for DoorDash, or rent out a spare room on Airbnb, the money flowing through those apps is about to get harder to hide—and in some cases, harder to keep.
Starting this year, a revived IRS rule drops the reporting threshold for third-party payment platforms from $20,000 and 200 transactions down to just $5,000, with a planned slide to $600 in later years.
That means payment apps like Venmo, PayPal, Cash App, and gig platforms will send you—and the IRS—a Form 1099-K for far smaller sums of side income.
It's a new spotlight on money you already owed tax on.
But for millions of Americans who picked up gig work to cover rising rent, grocery bills, and credit card balances, the paperwork is about to get real.
The $5,000 threshold counts gross payments, not profit.
A rideshare driver who grosses $6,000 but spends $2,500 on gas, insurance, and maintenance still gets a 1099-K for the full $6,000.
If they don't track deductions, they could owe tax on money they never actually kept.
The IRS taxes net income, but the form only shows the top-line number.
Without mileage logs, phone bills, or supply receipts, gig workers risk overpaying—or worse, getting a letter from the IRS asking why reported income doesn't match the form.
There's also confusion brewing around personal payments.
Splitting a dinner bill through Venmo isn't taxable income, and the IRS says friends-and-family transactions shouldn't trigger a 1099-K.
But platforms don't always know the difference, so some users may receive forms for money that was never income.
If that happens, you can request a corrected form—but it takes time and patience.
For households already stretched thin, the timing stings.
Gig work surged as inflation ate into paychecks, and many families rely on that second stream of income to stay current on mortgages and car payments.
A surprise tax bill of a few hundred dollars can tip a tight budget.
The practical fix is boring but effective: treat gig work like a business.
Track every mile, every supply run, every platform fee.
Set aside roughly 25 to 30 percent of net gig earnings for taxes.
Make quarterly estimated payments if you expect to owe $1,000 or more for the year.
A few free or low-cost apps can log mileage automatically, and a simple spreadsheet beats a shoebox of receipts.
If your side income is small and steady, a one-time session with a tax preparer may cost less than the deductions you'd miss on your own.
One more wrinkle: some states have their own lower thresholds, so a worker in one state might get a form while a neighbor in another doesn't.
The bottom line for anyone earning on the side: the era of casual, untracked gig income is fading.
The platforms are reporting, the IRS is matching, and the only real defense is clean records.
Our take: this rule mostly catches small earners who were never trying to cheat—just trying to get by.
The workers who stay organized will be fine.
Final Thoughts
The ones who don't will feel it at tax time, and that's a tough way to learn a lesson about paperwork.