Shoutout to the PayPal 1099-K threshold change that caught me off guard

I've been doing small Fiverr gigs on the side for about 4 years now, mostly logo tweaks and basic graphic stuff for $50-$100 each. Last year I made around $2,800 total across 3 platforms, not enough to worry about taxes really. Then I got an email from PayPal saying they're sending me a 1099-K because of the new $600 threshold rule. I almost ignored it thinking no way that applies to me. But I sat down and actually added up every tiny payment from 2023 and sure enough it came to $2,150 just through PayPal. I had no idea that threshold dropped from $20,000 to $600. Ended up owing $340 in self-employment tax that I wasn't planning for. Has anyone else gotten surprised by this new rule?

3 comments

3 Comments

miaprice8d ago

Whoa wait, the threshold dropped that much? I thought it was still 20k for side hustle stuff.

wyattramirez8d ago

Didn't you hear about this from the IRS announcement last year?

dakota_miller937d ago

Yeah everything's just getting harder to keep track of these days.