If you’re among the many Americans who sell goods online or utilizes third-party platforms such as PayPal, Venmo or Cash App, note that your tax rules are changing. There are a bevy of new tax reporting rules that are being implemented because of the One Big Beautiful Bill Act being passed in July.
The bill, which was signed into law on July 4, makes changes to tax policy, including a reversal of the previous 1099-K reporting thresholds. The good news is that for small sellers and buyers, they’ll likely benefit from the changes.
Before the law went into effect, the IRS was scheduled to lower the reporting threshold to $600 beginning in 2026. That would have raised the number of taxpayers getting Form 1099-K. The new law reverses that plan.
According to Bankrate, “Under the ‘big, beautiful bill,’ the 1099-K reporting threshold reverts to $20,000 in payments and 200 transactions in a calendar year, effective for 2025 and beyond.” Bankrate adds, “This means fewer taxpayers will receive the forms — a welcome change for those who use platforms like PayPal or Venmo for occasional sales or personal transfers.”
Zelle is Not Part of the Reporting Requirements
It’s worth noting that Zelle is not part of these tax laws. “While most platforms are required to follow 1099-K reporting requirements, Zelle doesn’t fall within that category,” Bankrate explains.
The new law goes into effect starting with the 2025 calendar year, so the updated 1099-K thresholds will apply to tax returns filed in 2026.
“The changes will offer much-needed relief for casual sellers and small business owners who use platforms like PayPal, Venmo and Etsy,” Ella Rivkin, CEO of ERPS Group, an accounting firm in New York City, told Bankrate. So, there’s a good chance that the wood plaques you’re making for your friends and family and selling for next to nothing on Etsy won’t get you to the threshold, but always check with a tax professional.
Individual states also have their own tax laws and some have lower thresholds for 1099-Ks, so it’s wise to check your state’s tax policy. Again, also contact a tax professional when dealing with taxes.
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