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People earning money through side-hustles should file the tax form 1099-K to declare earnings.
AP/Reuters

If people don't report earnings over $600, they could be audited by the IRS.

The IRS warned this week that side hustlers and part-time workers should declare payments they've received from apps over $600 if they want to avoid paying taxes.

People who are earning income in addition to their full-time job, as well as gig workers, should file the tax form 1099-K to declare earnings, the IRS said. Failure to do so could trigger an audit from the tax collection agency. The threshold of how much workers earn before they need to make a tax filing has dropped significantly since last year. It used to be for earnings over $20,000 through more than 200 transactions, but it's now it's any payment over $600.

Lisa Niser, a tax expert, told Insider that the worst case for people who don't declare earnings to the IRS is that they are audited and could be subject to penalties and interest.

Niser told side hustlers to take a course on taxes or hire an accountant.

She believes that an accountant is a good investment for everyone as a good one will provide more than a tax return. Access to information can be valuable.

The American Rescue Plan of 2021, also known as the COVID-19 Stimulus Package, changed when it was passed by Congress last year.

The IRS said that it's important that your business books and records reflect your business income.

You have to report all of your income to the IRS. Cash, checks, and credit card payments are the most common forms of business income.

Side-Hustle Tax IRS