Clear Start Tax Warns: IRS Targets Digital Payments and 1099-K Filers in 2025 Crackdown
New Rules and Lower Thresholds Put Freelancers, Gig Workers, and Online Sellers at Greater Audit Risk
IRVINE, CA / ACCESS Newswire / June 9, 2025 / The IRS is tightening its focus on digital payments and third-party transactions in 2025 - and many taxpayers may not be prepared. According to Clear Start Tax, a national leader in tax resolution, individuals receiving income through platforms like Venmo, PayPal, Etsy, and eBay could face new scrutiny as the IRS expands its oversight of 1099-K forms and enforces a much lower reporting threshold.
Key IRS Changes Affecting Digital Income in 2025
Under updated IRS rules, third-party payment processors must now issue a 1099-K for total transactions exceeding $600 annually - a steep drop from the previous $20,000 threshold. That change significantly broadens the number of taxpayers who will receive tax documents for digital income they may not have previously reported.
Clear Start Tax explains that the new rules aim to reduce underreporting and close the tax gap-but they also put part-time sellers, freelancers, and side-hustlers in the IRS's spotlight.
"The IRS is no longer just looking at traditional income sources," said the Head of Client Solutions at Clear Start Tax. "Anyone who uses payment apps or sells online-even casually-could now find themselves facing unexpected tax bills or even audit risk."
Taxpayers Most Likely to Be AffectedThis shift affects a wide range of Americans, not just full-time business owners. Clear Start Tax identifies the following groups as most vulnerable to missteps or enforcement:
Freelancers and gig workers who use apps like Uber, DoorDash, or TaskRabbitPart-time sellers on Etsy, eBay, Facebook Marketplace, or similar platformsIndividuals using Venmo or PayPal for side income or informal workPeople unaware that even small-scale digital income is taxable
Failing to accurately report these earnings or ignoring a 1099-K entirely can trigger IRS notices, penalties, or audits.
See if you qualify for relief through the IRS Fresh Start Program by completing a free Tax Relief Survey today. It only takes a few minutes to take the first step toward resolution.
Why Documentation Matters More Than EverTaxpayers receiving 1099-K forms may find themselves confused about how much of that total is truly taxable. Without good recordkeeping, it becomes difficult to separate personal transfers from income, or subtract legitimate business expenses.
"We've seen clients receive 1099-K forms for transactions that weren't income at all," said the Head of Client Solutions. "That's why it's critical to keep clear records and respond properly - because the IRS assumes the full amount is taxable unless proven otherwise."
How Clear Start Tax Helps Digital Earners Stay Compliant
As these reporting rules evolve, Clear Start Tax provides essential support for taxpayers navigating the new landscape. The firm helps clients:
Review and reconcile 1099-K income before filingIdentify deductible business expenses to reduce tax liabilityRespond to IRS notices and resolve discrepanciesSet up payment plans or pursue relief if taxes are owed
Clear Start Tax emphasizes early intervention as the best way to avoid penalties and keep digital earners on track with IRS expectations.
About Clear Start Tax
Clear Start Tax is a full-service tax liability resolution firm that serves taxpayers throughout the United States. The company specializes in assisting individuals and businesses with a wide range of IRS and state tax issues, including back taxes, wage garnishment relief, IRS appeals, and offers in compromise. Clear Start Tax helps taxpayers apply for the IRS Fresh Start Program, providing expert guidance in tax resolution. Fully accredited and A+ rated by the Better Business Bureau, the firm's unique approach and commitment to long-term client success distinguish it as a leader in the tax resolution industry.
Need Help With Back Taxes?
Click the link below:https://clearstarttax.com/qualifytoday/
Contact Information
Clear Start TaxCorporate Communications Departmentseo@clearstarttax.com(949) 535-1627
SOURCE: Clear Start Tax
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Bloomberg
an hour ago
- Bloomberg
Why Is Huawei Downplaying Its Chips?
It may seem like odd messaging from a tech chief. But Huawei Technologies Co. founder Ren Zhengfei said that Americans have 'exaggerated' his company's chip achievements, which 'still lag behind the US by a generation.' When it comes to the race for the hardware needed to support artificial intelligence, his company 'isn't that powerful yet,' Ren added in a lengthy front-page interview with the People's Daily this week. Still, there is 'no need to worry' about the US restrictions, he insisted. By bundling Huawei's chips together, or so-called clustering, they can still match rival offerings from top global players.
CNBC
an hour ago
- CNBC
The U.S. dollar hasn't been this weak in 3 years. What that means for stock investors
The U.S. dollar index on Thursday hit its lowest level since late March 2022 — putting renewed spotlight on what has been one of the biggest stories in financial markets this year: the weakening greenback. As the world's reserve currency, the U.S. dollar is held in large quantities by global central banks. Key commodities such as gold and oil are priced in dollars. Many foreign transactions, even when American parties aren't involved, also are conducted in dollars. When something that important reaches multiyear lows, investors and consumers alike are forced to consider the implications of the move for U.S. markets and the economy as a whole. At the heart of it is exchange rates. What is the rate at which a foreign buyer can exchange their local currency for dollars? And what is the rate at which Americans can exchange their dollars for foreign currencies? Those who have traveled internationally are likely quite familiar with this. From the investor perspective, the question is how the strength of the dollar plays into our companies' sales and earnings. The U.S. dollar index, which measures the greenback against a basket of foreign currencies including the euro and Japanese yen, has trended lower since January. However, its losses picked up steam after President Donald Trump announced his "Liberation Day" tariffs on April 2. While many assets sold off then and have since recovered, the dollar hasn't shared the same fate. When the dollar is strong, foreign buyers need to trade in more of their local currency — the currency they save and spend in — for U.S. dollars in order to purchase any dollar-denominated goods. Keep in mind: Even if a European purchases an iPhone in euros, those euros are eventually converted to dollars and that conversion rate is going to factor into the euro-denominated price that European shoppers may see in their local store. On the other hand, a weak dollar means that foreign buyers have relatively more buying power. When their local currency strengthens against the dollar, they can trade in fewer local currency units such as euros for an equal number of dollars. In effect, the price has gone down, a dynamic that usually leads to an increase in demand — all else equal. Sales going up because the foreign buyer feels a relative increase in their buying power is one reason why a weaker dollar is generally positive for U.S. companies' overseas business. To be sure, in this scenario, the U.S. company may see an increase in costs for any supplies that it needs to import from foreign countries because their dollars are worth less. However, because companies sell goods and services for more than it costs to make them, the end result is generally a net positive for earnings — the magnitude of that benefit depends, of course, on the share of sales generated outside the U.S. and the makeup of the supply chain. On Microsoft's most recent earnings call, CFO Amy Hood illustrated this dynamic (FX is shorthand for foreign exchange): "With the weakening of the U.S. dollar in April, we now expect FX to increase total revenue growth by 1 point. Within the segments, we expect FX to increase revenue growth by 1 point in Productivity and Business Processes and less than 1 point in Intelligent Cloud and More Personal Computing. We expect FX to increase [cost of goods sold] operating expense growth by less than 1 point." As we see, Microsoft is expecting cost of goods sold to increase at a lower percentage than the benefit to revenue growth. Indeed, we heard similar commentary Thursday from Wall Street veteran and IBM Vice Chair Gary Cohn. Appearing on CNBC's "Squawk Box" on Thursday morning, Cohn affirmed that the weaker dollar is good for IBM. "Yeah, it is," he said. "IBM is an American-based manufacturing company that sells a lot of overseas and repatriates earnings. Think of U.S. domiciled multinational corporations that sell product overseas and report dollar-based earnings." To recap: For investors, a weaker dollar should generally be viewed as a tailwind for foreign sales of U.S. companies — even though some of the benefit may be offset by inputs sourced from foreign markets that are purchased in dollars. The net effect on the bottom line depends on each individual companies' mix of foreign and domestic sales and inputs. There are additional ripple effects on consumer behavior that investors should monitor, beyond the euro-denominated iPhone example we touched on above. Arguably the most important is travel demand, which obviously impacts all sorts of companies including Club name Disney and Bullpen member Airbnb . A weaker dollar means that U.S. citizens traveling abroad will need to convert more dollars than before into the currency of their destination. Consequently, U.S. consumer appetite for international travel should be expected to take a bit of a hit. Back in 2022, when the euro and dollar hit parity for the first time in two decades , everyone was talking about how good it was to be an American traveler going to Europe that summer. It's a different ballgame now. The beneficiaries this summer are foreign travelers coming to the U.S., who will arrive with relatively more buying power than they otherwise would have in January. The U.S. dollar index ended that month around 108. It's around 98 on Thursday. The implication is that a trip to Disney's theme parks in Florida and California is relatively more affordable for intentional travelers than it was just a few months ago. In this way, U.S. companies also may be able to benefit in the domestic market from an increase in foreign tourism — unless there are other countervailing forces that would make them want to travel elsewhere . How does all of this play into our investment decisions? The answer is that it's one data point that we consider in the much larger universe of data. As fundamental investors, we must be aware of the implications of macroeconomic forces such as currency markets. But they do not, by themselves, drive our moves. Consider the case of Apple , where its growth potential in foreign markets is a major opportunity and reason to be optimistic about its future. In that sense, it's reasonable to assume that a weaker dollar would be a positive for the company – and indeed, it is. However, it is not a large enough positive for us to forget about all the other headwinds for Apple. Sure, the dollar is weaker, but it still must deal with tariffs resulting from where its goods are manufactured. There are court battles threatening its lucrative services business. Of course, there's the seeming lack of progress on Apple Intelligence. History suggests Apple is a strong enough operator to navigate these issues – and we are not counting them out of the AI race just yet, given its record-high installed base is a major advantage. The point is that there are much bigger considerations in our investment decisions than currency fluctuations. Or consider the case of Home Depot , which does 92% of sales in the U.S. but sources many goods internationally. The dollar is headwind – to the tune of $275 million in sales in the first quarter – given that the bulk of demand comes from U.S. consumers and the weak dollar serves to increase the supply costs (not unlike an import tariff). However, that is not in our view enough to sell the stock, not when interest rates are expected to decline and in turn provide a boost to the housing market, whether that's through renovations or new building activity. Finally, while we won't get too political, investors should also keep tabs on what is fueling the move in currency markets. In a lot of cases, the "why" behind the move is likely to be far more useful to investors than the absolute strength or weakness of the greenback. In other words, we must ask ourselves what is causing the move, and then ask ourselves what that cause means for our investments. For example, consider a situation where the dollar is weakening simply because interest rates are expected to move lower as the rate of inflation declines – and so there's less demand for U.S. government bonds and the dollars needed to purchase those bonds. That's a pretty solid reason for a weakening dollar and there wouldn't be a cause for concern among investors. On the other hand, if the dollar – or any other currency for that matter – is weakening because investors are growing concerned about the stability in that country, that would likely be cause for concern because it may portend a fundamental shift in capital flow dynamics. In the end though, these are more so concerns for macro-oriented investors. As primarily bottoms-up fundamental investors with a long-term time horizon, we are much more focused on happening with companies themselves — and the industries they're operating in — than we are with the strength of the U.S. dollar in any given stretch of time. (Jim Cramer's Charitable Trust is long HD, DIS and AAPL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Chicago Tribune
an hour ago
- Chicago Tribune
Cost of President Trump's tariffs hits home, as several consumer goods and services surge to record highs
President Donald Trump's trade war is affecting Americans from the grocery store to electric bills, with the cost of bananas, ground beef and electricity surging to all-time highs, according to the latest data from the Consumer Price Index. Major U.S. retailers have announced price hikes as a result of tariffs, and the cost of a handful of everyday goods and services has increased by 5% to 10% since Trump took office. But not all consumer products are trending up. Since December, the average nationwide cost of bread, milk and tomatoes has dropped, and the price of chicken and oranges has stayed much the same with the change of administrations. The Tribune is tracking 11 everyday costs for Americans — eggs, milk, bread, bananas, oranges, tomatoes, chicken, ground beef, gasoline, electricity and natural gas — and how they are changing, or not, during Trump's second term. This tracker is updated monthly using CPI data from the U.S. Bureau of Labor prices dropped for a second straight month in May, falling 57 cents from March's record high. According to the latest data, the average cost of a dozen large Grade A eggs is $4.55 nationwide — tumbling below the $5 mark for the first time since January. The decline in egg prices is likely due to a decrease in bird flu cases in commercial and backyard flocks since the start of the year. In the first two months of 2025, 12.6 to 23.2 million birds were affected by highly pathogenic avian influenza in the United States, according to the U.S. Department of Agriculture. In March, that number was 2.1 million, and as of April, the virus was detected in only 1 million U.S. birds. Though still significantly lower than the number reported in January and February, cases surged again in May, with 5.2 million birds affected — the vast majority concentrated in three commercial flocks in Arizona. This uptick in cases could indicate another small jump in prices during the summer months. Currently, the cost of eggs is about 9.6% higher than before Trump took office. It's not just poultry flocks and wild birds that have been affected by bird flu. According to the Centers for Disease Control and Prevention, the virus has been reported in dairy cows since March 2024, and just last month, there were 24 new confirmed cases at dairy farms in Idaho, Texas and Arizona. But while avian flu cases are ticking up again in poultry, they're declining in cattle, with the number of newly infected dairy cows just half of that reported in April. As a result, the cost of milk is down month-over-month, but a look at the year-over-year change is a bit different: Prices are up more than 4%. As of May, a gallon of fresh, fortified whole milk would set you back about $4.02. As of May, white bread cost $1.88 per pound. That price is slightly lower than it was when Trump started his second term and about 10 cents less than it was 12 months ago. Shoppers can expect to pay more for their next bunch of bananas. The staple fruit cost a record-breaking $0.66 per pound in May. The price jumped 2 cents compared with April — the single-biggest month-over-month increase going back to January 2021. This sudden spike is likely due to Trump's trade war, with tariffs levied against the country's top banana importers like Guatemala, Ecuador, Costa Rica, Honduras and Mexico. Orange prices are up 5% from the previous month. This change, however, likely has little to do with the current administration. Like many citrus fruits, the cost of oranges is heavily tied to the harvesting season. As we exit orange season, supplies will decrease, coinciding with an increase in demand, thus triggering higher prices. This is standard for the fruit market, with oranges cheapest in the winter months, then increasing in cost throughout the late spring and summer and eventually peaking in September or October each year. Currently, the average price per pound for navel oranges is $1.56 nationwide. Though perhaps not the first thing you think of when you hear the term 'staple food,' tomatoes are an essential ingredient in all kinds of dishes, from pasta and pizza, to soups, salads and BLT sandwiches. In May, the average price of field-grown tomatoes was approximately $1.71 per pound. That cost is about 8 cents lower than it was in April and down roughly 17% since Trump took power. This decrease, however, is largely due to the growing season. Like oranges, tomato prices vary depending on the time of year, rising in the fall, peaking in the early winter months and then plummeting in the spring. Still, prices are down a little more than 8% from this time last year. Chicken is another consumer product that's seen a price spike as a result of bird flu — though not nearly as drastically as eggs. One reason? Significantly more egg-laying hens have been culled than chickens raised for meat. The national average crested above $2 per pound for fresh, whole chicken for the first time last year and hit a record high of $2.08 in November. Since then, the average price has been roughly the same. According to May CPI figures, chicken is $2.06 per pound. Ground beef prices continue to trend up, up and up. For the fourth-consecutive month, the cost of beef hit an all-time high, with the average price of 100% ground beef chuck now $6.02 per pound. The rising cost can be attributed to a number of factors. In addition to several ground beef recalls reported in recent months, the U.S. cattle inventory is at a 25-year low, and severe drought in parts of the country has further reduced the feed supply, according to the U.S. Department of Agriculture. More recently, in trade talks with the U.S., the United Kingdom agreed to buy more American beef, a deal that the president says will lead to greater exports. But as China and the European Union's tariffs on beef and other U.S. farm exports remain, this may not be the last time we see record prices this year. Perhaps 2025 is the year to give vegetarianism a try? In May, the average price of electricity nationwide was 18 cents per kilowatt-hour. That average has held more or less the same since this time last year, with the typical month-over-month changes registering at less than a fraction of a cent. Even so, the current cost of electricity is the highest on record — going back more than 45 years. The price at the pump fell slightly month-over-month — dropping 2 cents from April to May. At $3.31 per gallon of regular unleaded, gasoline costs about 5% more than it did during the last month of the administration of President Joe Biden. Year-over-year, however, prices have declined by roughly 12%. In Chicago, gas is about 11 cents higher than the nationwide average, sitting at $3.42 per gallon, according to the U.S. Energy Information Administration. The cost of piped utility gas, or natural gas, saw no change month-over-month, averaging at $1.63 per therm. The price is holding at a two-year high and is up nearly 7% under the Trump administration.
