In a major legislative update—the "One, Big, Beautiful Bill" ("OBBB") — has rolled back the reporting threshold for Form 1099-K, restoring a more familiar standard for many self-employed professionals. 

These changes are in effect for 2025 tax returns that will be filed in 2026.

This change is more than just a technical adjustment. It affects how freelancers track income, prepare for the coming tax season, and interact with digital payment platforms. 

Let’s break down what’s changed, what it means for your business, and how to stay compliant in this new landscape.

What Is Form 1099-K?

First, a refresher on Form 1099-K. It is an IRS information return used to report payments received through TPSOs for goods or services. It’s designed to improve voluntary tax compliance by ensuring income received via digital platforms is properly reported.

If you receive payments through platforms like Etsy, Uber, DoorDash, or freelance marketplaces such as Upwork or Fiverr, you may be issued a 1099-K if your activity meets the threshold. However, under the reinstated rules, many freelancers will no longer receive this form unless their volume and income are substantial.

It’s important to note that Form 1099-K is not the only way the IRS tracks income. Just because you don’t receive one doesn’t mean your earnings aren’t taxable. The responsibility to report income remains squarely on your shoulders.

Keep in mind that your state may have a lower reporting threshold for TPSOs, which could result in you receiving a Form 1099-K, even if the total gross payments and transactions did not exceed the federal reporting threshold. 

Changes to 1099 Reporting Under The One Big Beautiful Bill

Under the One Big Beautiful Bill, third-party settlement organizations (TPSOs)—such as PayPal, Venmo (for business), Stripe, Square, and others—are now only required to issue a Form 1099-K if:

• The gross amount of reportable transactions exceeds $20,000, and
• The number of transactions exceeds 200.

This reinstates the threshold that was in place prior to 2021, reversing the lower limit introduced by the American Rescue Plan Act of 2021 (ARPA), which had dropped the reporting requirement to just $600, regardless of the number of transactions.

The 1099-K Reporting Rollback: Why It Matters to Freelancers

The rollback to the $20,000/200 transaction reduces the likelihood of receiving unexpected tax forms and simplifies the reporting process for low-volume earners.

However, it also places greater emphasis on personal recordkeeping. Without a 1099-K to prompt you, it’s up to you to track and report your earnings accurately. This is especially critical for freelancers who receive payments through multiple platforms or who mix personal and business transactions.

Freelancers Must Track All 1099-K Income

Even if you don’t receive a 1099-K, you’re still required to report all taxable income. Here are some practical steps to help you stay ahead:

• Track your income independently. Don’t rely solely on tax forms to know what you earned. Use accounting software, spreadsheets, or even a simple ledger to record every payment received for freelance work.
• Separate personal and business transactions. Use dedicated accounts or payment tags to avoid confusion. If you’re using platforms like Venmo or PayPal, make sure business transactions are clearly labeled and kept separate from personal ones.
• Review platform policies. Some TPSOs may still issue 1099-Ks based on their own internal thresholds or business practices. Stay informed about how your payment platforms handle reporting. 
• Consult a tax professional. Especially if you’re unsure how to report 1099 income or what the state regulations are. A CPA familiar with freelance tax issues can help you avoid costly mistakes and maximize your deductions.

Looking Ahead: 1099-K and Other Income Reporting is Required

Freelancers should remain vigilant; legislative changes can shift reporting requirements quickly, and digital payment platforms may still issue forms based on their own policies. For example, some platforms may choose to issue 1099-Ks at lower thresholds to simplify their own compliance or reduce audit risk.

Additionally, the IRS continues to explore ways to improve tax compliance in the gig economy. Future legislation could revisit thresholds, redefine reportable transactions, or introduce new forms altogether.

Freelancers should also be aware of state-level reporting requirements. Some states have their own thresholds for 1099-K reporting, which may differ from federal rules. If you live in a state with aggressive tax enforcement, you may still receive forms even if you fall below the federal threshold.

The Bottom Line on 1099-K and Your Freelance Business Obligations

Freelancers are still responsible for reporting all taxable income, regardless of whether you receive a form. The best way to protect yourself is through proactive recordkeeping and informed tax planning.

Here’s a quick recap of smart moves every freelancer should make:

• Keep detailed records of all income and expenses.
• Use separate accounts for business and personal finances.
• Stay informed about IRS updates and platform policies.
• Work with a tax professional who understands freelance work.
• Don’t wait until tax season—plan ahead throughout the year.

Understanding the evolving tax landscape for your freelance business can make tax season less stressful and more predictable. Whether you’re a seasoned consultant with a full-time business or a weekend gig worker, understanding your obligations and staying organized will help you thrive in today’s evolving tax landscape.