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Somewhere between 25% and 35% of working Americans are gig workerseither as a supplement to their primary income or as their full-time job. And for many gig economy workers, cash apps and marketplaces offer a simple and convenient way to receive payments. Enter the IRS form 1099-K. Third-party payment apps have to issue a 1099-K form to taxpayers who make more than a certain earnings thresholda threshold which the IRS significantly lowered for the 2024 tax year. The IRS anticipates that millions of Americans will receive a 1099-K form for the first time this year because of that reduced earnings threshold. If youve been wondering why you received a 1099-K form this year, heres what you need to know. 1099-K history Prior to the introduction of third-party payment apps and online marketplaces, the IRS typically received reporting about your income from either a W-2 form (for traditional employees) or 1099-MISC form (for contractors, freelancers, or other nonstandard employment). The introduction of third-party payment apps like PayPal changed the landscape for taxable income. Even though freelancers who collect payments via third-party apps must claim every penny of income (just as employees must track and claim their tips), taxpayers seriously underreported their income from third-party payment apps when the technology was new. Uncle Sam estimates that taxpayers underreported $450 billion in 2006, which equated to a 17% noncompliance rate. Recognizing that modern problems require modern solutions (or at least a new tax form), the Housing and Economic Recovery Act of 2008 instituted a requirement that banks and credit card merchants report payments to the IRS via the new form 1099-K. The first 1099-K forms were issued in 2012 for the 2011 tax year. Who issues 1099-K forms? There are several different types of organizations, apps, sites, marketplaces, and platforms that may be required to issue a 1099-K form. These may include: Auction sites (such as eBay) Ridesharing platforms (like Uber or Lyft) Crafting marketplaces (such as Etsy) Crowdfunding platforms (like Kickstarter) Freelance marketplaces (like Fiverr) Online marketplaces (such as Craigslist or Facebook Marketplace) Peer-to-peer payment platforms (like Venmo, PayPal, or Cash App) Ticket exchange sites (such as StubHub or TicketSwap) If you have earned money through any of these kinds of platforms, you may receive a 1099-K form this yearif you have taken in more than the minimum earning threshold (see below). The one commonly used app that will not issue 1099-K forms is Zelle. Thats because Zelle directly transfers money from one bank account to another, rather than holding your funds in an account for you, the way PayPal, Venmo, and Cash App do. But just because Zelle will not issue a 1099-K doesnt mean youre off the hook for reporting any earned income you receive via Zelle. You will have to report income Zelled to your account on Schedule C of your tax return. 1099-K minimums Until the 2024 tax year, the 1099-K form was only issued to taxpayers with more than 200 transactions on third-party payment apps who earned $20,000 or more in income. This meant only the individuals who were seriously committed to making a living via gig work received a 1099-K form. That is now changing. For the 2024 tax year, if you made $5,000 on a payment app, you will receive a 1099-K, no matter how many transactions you cleared. This means hobbyists and side hustlers are much more likely to receive a 1099-K this yearand the likelihood will keep going up. Thats because the minimum income threshold for the 2025 tax year is $2,500, and it will dip to $600 thereafterand there is no minimum number of transactions to trigger a 1099-K filing. 2023 Tax Year2024 Tax Year2025 Tax Year2026 Tax Year and BeyondEarnings threshold$20,000$5,000$2,500$600Minimum transaction requirement200NoneNoneNone This means your aunt Esther who has an Etsy storefront that sells five or six risque needlepoint projects per month will be as likely to receive a 1099-K form as a professional eBay seller with thousands of transactions per week. Fixing 1099-K errors Not all transactions on third-party financial apps are taxable. When your sister Venmos you $75 to pay for her half of your mothers birthday gift, that money is not taxable. But if you receive Venmo payments for your side gig as a photographer, that money is taxable. This means anyone who only has a single payment app for personal and professional payments may see errors on their 1099-K form. To help ensure youre not charged tax on nontaxable payments from friends and family, the IRS has added a space at the top of the 2024 Schedule 1 form to report any money that was included on your 1099-K in error. The spot on the Schedule 1 form also allows you to report 1099-K money related to personal items you sold at a loss. For example, if you resold courtside basketball tickets for $5,000 and accepted payment via Venmo, that would trigger a 1099-K form. But if you purchased those tickets for $6,000 and sold them at a loss, the $5,000 you received is not taxable. You can include that $5,000 in the new space on the Schedule 1 form, and you will not owe taxes on it. The future of 1099-K filing The IRS wasnt quite done tinkering with the 1099-K rules when it lowered the earnings threshold and minimum transaction requirement. As of the 2025 tax year, third-party payment apps may request your taxpayer identification numberwhich for most people is their Social Security number. If a third-party payment platform does not have your valid tax ID number, the platform has to withhold 24% of your payment for taxes. This is similar to how your taxes may be withheld from a traditional paycheck, but it can come as an unpleasant surprise to aunt Esther when she sells the $100 Kirk/Spock needlepoint to an enthusiast and only receives $76. While the withheld amount can be credited to the tax you owe when you file your taxes, or it may be refunded if you do not owe any taxes, many taxpayers will prefer to simply provide their Socia Security number to avoid the withholding altogether. File responsibly With more ways to get paid, there are more opportunities to underreport earned income. To combat taxpayer forgetfulness (both genuine and feigned), the IRS introduced the 1099-K form, which requires third-party payment apps to report earnings over a certain dollar amount. As of the 2024 tax year, anyone earning $5,000 or more via payment apps or platforms will receive a 1099-K form. In 2023 and earlier, only taxpayers who earned over $20,000 and had 200 or more transactions got such a form. The minimum earnings threshold will go down to $2,500 for the 2025 tax year, and to $600 thereafter and there is no minimum transaction requirement. Getting more tax forms may feel like a crappy reward for all the hard work you have put into your side gigbut the new 1099-K filing requirements will ultimately make it easier for you to correctly file your taxes. And correct tax filing keeps the auditor away.
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E-Commerce
While Valentines Day and football get the majority of publicity during February, theres more to this month than love and sports. You may want to consider changing up your typical happy-hour order this weekend to celebrate an unconventional holiday. Saturday, February 22, is National Margarita Day. This refreshing beverage has a long history of making those who imbibe forget their troubles for a while. Let’s take a look at the invention of the drink and some fun deals to take advantage of. What’s in a classic margarita anyway? While many variations of the beloved drink have popped up over the years, in its purest form, a margarita is comprised of tequila, lime juice, and Cointreau or Triple Sec. Traditionally served in a glass with a salted rim, its sweet, salty, and sour elements make for a delicious flavor combination to sip on. Who invented the margarita? There are conflicting stories about the creation of this cocktail. One version credits Carlos “Danny” Herrera. Necessity was the mother of invention in this version. In the late 1940s, Herrera, who owned the Tijuana, Mexico-area restaurant Rancho La Gloria, wanted to make something for customer Marjorie King. The young actress was allergic to all alcohol except tequila but didnt like to drink the spirit straight. Never one to back down from a challenge, Herrera started experimenting and landed on the flavor combination we now know and love. He called the drink a Margarita (Spanish for Marjorie). Another story asserts that Margarita Sames is the real hero. This Dallas socialite claims to have created the drink while entertaining at her Acapulco vacation home in 1948. As this story goes, Tommy Hilton was one of her guests and liked it so much that he brought the drink to his hotels. But her claim is discredited in Anthony Dias Blues The Complete Book of Spirits, which states that the first importer of Jose Cuervo to the United States used the tagline, “Margarita: it’s more than a girl’s name,” in 1945. What are some deals for National Margarita Day? Chilis Grill & Bar and Lifetime have teamed up for the big day. They released a 15-minute romantic comedy film starring Maria Menounos and Taye Diggs about a powerful big-city lawyer who comes back to her rural hometown for the holiday. You can stream it here, then head into the restaurant for $5 Tequila Trifectas at participating restaurants or a StrawEddy, the Margarita of the Month. If you find yourself in California, head to your local El Torito on Saturday. Participating restaurants in this Mexican chain are offering $10 Margarita Flights. Variety is the spice of life after all. Those in Atlanta can head to one of three Tin Lizzy Cantina locations. They are offering $6 House Margaritas and $8 Casa Noble Margaritas. TexMex chain Chuy’s is also offering drink specials. Finally, the New York Daily News has a roundup of Margarita Day deals in and around the Big Apple. However you celebrate the boozy holiday, make sure to say Salud!
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E-Commerce
Kate Aronowitz tells me she first set out in graphic design because it felt like a discipline that helped her bring order to things. Many years later, she has a love-hate relationship with being labeled a creative because the creative process, as she sees it, is not just about art and designits as much about solving problems as it is building things from scratch. She also believes everyone can be creative under the right circumstances. As portfolio operations lead at Google Ventures, Aronowitz has collaborated with some of the worlds most inspiring and hardworking founders. And now she has the opportunity to shape and inspire the next generation of students at Savannah College of Design as the schools newly minted executive in residence. I usually am the first one up. I go downstairs with my dog, George, make coffee, and we go outside. I like having quiet time outside. Ill walk him or go to Pilates. I read the news. As much as it pains me, I like to know whats going on. Im not naturally an early riser, but if I approach the day with a clear mind, my work is better. Im a big believer in reading a room. I think its more my predisposition. Even when I started my first design role as a junior designer, I often worked as a translator. When you get a design person and a businessperson together, they are often butting heads. Im always the one saying, Actually, I hear this. Listening to what people are saying, watching their body language, seeing how much people speak upits just being a very keen observer. Im fascinated by people, and UX design is about solving real peoples needs. A lot of the time, they cant express what they need; you have to listen for it. I dont create well in total silence. I like a lot of white noise. If I have to write, I prefer to write on an airplane or in a café. Silence is very deafening. I go to sleep listening to podcasts. I find it hard to design and create if I put an hour on the calendar and say, Youre sitting and doing this thing. My best ideas come to me if I can get the questions I need to work on a week in advance. Im good at having that run parallel; Im processing in the background. Whether Im at the mall or watching a movie or baking, ideas pop into my head. I find using my hands to be very helpful. Even if its business-case kind of stuff. I find it hard to be creative and type at the same time, so I handwrite a lot out. I find typing to be very constricting. I work with really interesting founders. And I see my role as a designer more so now almost setting the stage and curating the conversations that allow creativity to happen. I am helping make founders ideas real. A lot of my day is being a really good listener and figuring out what problems need to be solved and figuring out how to do it quickly. Im an optimist. If you look at a problem long enough, you can truly come up with a solution that will delight people. I dont believe theres any problem thats not solvable. I rarely get frustrated. I trust the process. If you iterate, put the right people in the room, and ask questions, you will learn something and you will move things forward. Im interested in expanding what creativity means. Creativity has been put in this place where you either are or arent, or theres creative time and there isnt. Its thinking about a problem in a different way. Everyone has the ability. Im so much more open now to who is in the room. I hate when people are labeled creative. When you label a person as a creative, it limits it so that this is the only person in the room who can be creative. Im a big list-maker. I break it into things. I am very strict about what fits onto my first list. I keep a running notes doc. I have a 2024 doc and its all the calls I was on that year. At any point in time, I can go back and pick up a thread where I left off. A lot of it for me is documenting and list-making so I dont have to keep it in my mind. I can go back and check things. I need my alone time. Driving or walking the dog. Time with a whiteboard. If Im really feeling lost and Im not sure what to do, if I just put a pen in my hand and draw out what Im thinking I find it really helpful to just get out whats in my head. Im very bad with distractions. I love doing the NYT crossword every day; its hard not to be following whats going on [in the news]. Im not great at tuning things out, but I have other outlets. I love baking and cooking. I started sketching again on my iPad. I have one of those expert Apple pencils. Even if its useless stuff like drawing a weird apple on my iPad, it centers me. If you can sit and noodle over the shades of red for an hour and a half, its good for your mind to be a better observer. The rut I find myself in is more like self-doubt. I am a bit of a perfectionist. That is what drew me to graphic design in the first place. I was never attracted to fine art. I liked graphic design because it brought order to things. I hold a high bar for myself and always want to make sure Im bringing value, so I do question myself. I have to remind myself this is part of the process: Knowing that sometimes things dont work and thats okay, and what can you learn from it. You have to get small wins every day. A lot of what we do with founders is help them prioritize. Some problems can be pushed off. Just ask yourself, whats keeping you up at night now? And how can you solve something immediately in front of you? A lot of it is taking big problems and breaking them down into bite-size chunks. Its so important to close out the day and feel like you made some small steps in progress.
Category:
E-Commerce
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