You receive a 1099 once you have earned over 600 dollars in freelance income. It doesn’t matter how much, but it must be more than $600. You’ll file the form with your federal taxes and report that amount as self employment earnings for the year.

If you are an independent contractor or freelancer, then you are most likely familiar with the concept of a 1099 form. Many freelancers receive this at tax time, but what is it? And since your not a freelancer, what does it mean for you?

Beginning in January of 2022, Venmo, Paypal, Zelle or Cash App will send 1099-Ks to anyone selling goods or services through the app. A lot of people have been wondering, what exactly does this mean?

It’s important to note that what’s considered taxable has not changed. If you use these apps for any reimbursements, that is still considered a nontaxable event.

However, if you sold a couch on FB marketplace, got paid for babysitting or even received more than $15,000 as a gift from someone, all of these will be considered taxable activity and you’ll receive a 1099 to report this income.

So what should you do?

1. If you’re selling on FB marketplace or anywhere, try to have some sort of receipt or proof of what you paid for the items. This will increase your basis and reduce your taxable income.
2. If you’re getting paid for babysitting or dog walking, just get a little more organized. Keep track of your expenses related to the job in order to reduce your taxable income.
3. If some gave you $15,000 or more through out the year, please leave their name, number and social media links so I can become their friend too!! Lol. But seriously, be prepared to pay on gift taxes. If they sent you anything less than $15,000, you don’t need to worry about paying tax on it, but have the proper documentation to prove that it was a gift, not payment for services or goods.

As usual I’ve tried to keep things short and sweet. Let’s get organized so you don’t overpay in taxes.