IRS Lowers Threshold for Taxable Earnings on Mobile Apps

Form 1099-K to be Sent to More Users as Critics Warn of Potential Impact on Small Businesses

Form 1099-K, which taxes earnings made on mobile apps, will soon be sent to more people as the IRS lowers the threshold for taxable earnings on these platforms.
The IRS has delayed the $600 threshold for taxation, planning to decrease it gradually over the next few years. For the 2024 tax season, the threshold will be $5,000.
The rule change, approved by Democrats in 2021, requires payment platforms to send Form 1099-K to the IRS and users if their transactions total more than a certain amount in a year.
The rule only applies to payments received for goods and services transactions, excluding personal transactions like gifts, reimbursements, or selling personal items at a loss.
The change aims to prevent tax evasion by ensuring the full extent of gross income is reported, but critics argue it could hurt small businesses.