Anyone who earned $5,000 or more in payments in 2024 on any payment platform, app, or online marketplace must report the income on their tax return this year. That could be from selling products on StubHub, Etsy, eBay, etc., or services on sites like Airbnb. If you’ve sold goods or services on any of these platforms, the companies will send you a tax form called a 1099-K by the end of this month.

Previously, most sellers had to report when their sales reached $20,000 a year. But the IRS is slowly lowering that threshold to just $600: There is a $5,000 threshold for the 2024 tax year, $2,500 for 2025 (reported on next year’s tax forms), and $600 for 2026.

Taxes are owed on profits made, not necessarily all money earned on online marketplaces; if you earn less than what you paid for the item—say, you sell some of your used furniture on Facebook Marketplace—you won’t need to disclose it to the IRS. You do not need to report personal charges to friends and family, like paying for gifts or sending money to children.

Reporting income from online side hustles has always been legally required, but many Americans do not do it. Now, companies are also required to send paperwork to the IRS, meaning underreporting will be easier to catch. It’s like a W2 or 1099 form from an employer, which the IRS has received since the 1940s. Now, the agency has much more information on each seller’s side activity.

“Profits on side income have always been taxable but the IRS decided to change the reporting requirements, they want to make sure people aren’t falling through the cracks and not paying tax,” says Elizabeth Ayoola, personal finance expert at NerdWallet. “If you don’t want the IRS knocking on your door for unpaid taxes, consumers can also cross check their personal records.”

The change comes as more Americans use payment apps like Cash App, PayPal, Square, Stripe, and Venmo for a growing number of transactions, both business and personal (yes, that includes for illicit transactions and theft). Reporting is a little different for individuals and registered businesses, so see a tax professional if you need help.

“Taxes can be confusing for consumers, but it’s better to be clear than confused so if you don’t know what you owe, consider working with a professional,” says Ayoola. “That can be cheaper than paying the IRS penalties for unpaid taxes.”

The reporting changes were meant to take effect back in 2022, but have been delayed due to consumer and business confusion. Notably, the payment app Zelle is exempt from the reporting rule, but if you are paid via Zelle you still need to report it.

Ayoola recommends that going forward, consumers who sell goods or services online record their earnings. It can also be smart to start making quarterly tax payments if you are a freelancer or someone else who routinely gets paid via these apps. That will make it easier come tax season.

“You cannot hide this, the IRS is aware you earned that money,” Ayoola says. “It can be costly if an audit is done and you end up having to pay penalties.”