The IRS Is Watching Your Side Hustle—Here’s What Gig Workers Must Know in 2025

You’ve got a side hustle—maybe it’s selling on Etsy, driving for Uber, or doing freelance marketing. It’s extra income... but now, it’s also IRS income. And in 2025, the rules are changing—again.

New 1099-K Threshold Is Now $5,000

In 2025, the IRS lowered the reporting threshold from $20,000 to just $5,000. Platforms like PayPal, Venmo, Cash App, Etsy, and others will now issue a 1099-K if you earned just $5,000 total.

That’s less than $417/month.

What This Means for You:

• Even small-time sellers will have reported income

• Missing this income on your return will trigger audits

• Expect a paper trail—even for casual income

Common Mistakes We See:

• Clients thinking “gift” income on Venmo isn’t taxable

• People deducting non-qualified expenses

• Freelancers missing quarterly tax payments

2025 Enforcement Boost

With new software, the IRS is scanning mismatches between reported income and tax returns in real-time. If your 1099-K shows income and your return doesn’t? Red flag.

How We Can Help:

• Clean up past years

• Negotiate penalties

• Set up tax planning for next year

• Represent you if you get audited

Don’t Wait Until Tax Season

If you’re freelancing, side hustling, or earning on platforms—get ahead now. The earlier you work with All State Tax Resolution, the more options we have to protect your money (and your sanity).