Selling handmade products on Etsy, online tutoring and web editing are a few side hustles many turned to throughout the COVID-19 pandemic. As a result of being laid off or not feeling safe to return to work, many people started the small businesses they always dreamed of. Consequently, the use of mobile payment apps such as Venmo or PayPal grew, as it was a convenient way to receive payment. In 2020 alone there were 900 million new mobile payment app users worldwide. One of the upsides of using these apps is the ability to receive payment and move the money into a personal account immediately.
Another plus? In the past, you weren’t required to report your earnings via mobile payment apps to the IRS unless you had at least 200 transactions exceeding $20,000 in total value. But starting January 1, 2022, if you make over $600 in transactions on goods and services, you will need to report your earnings for next year’s filings in 2023. If you exceed this goods and services threshold, you will receive a 1099-K form.
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