If you're a U.S. citizen making money from the sale of goods or services, the IRS considers it taxable income regardless of how or where you're paid. But some sellers have tried to fly under the feds' radar by taking payments through an online app, such as Paypal or Venmo, then not reporting them on their tax return.
This year, however, the IRS will have a clearer picture of the revenue that people have been collecting online. That's because payment apps, online marketplaces and gig-economy companies such as Airbnb are now required to report even relatively modest amounts that users collect for the sale of goods or services.
Previously, the companies had to submit reports only for users with at least 200 transactions and at least $20,000 in revenue in a given year. Effective Jan. 1, the new threshold is one or more transactions that collectively raise at least $600 in revenue.
