by Amanda O'Brien | Accounting News, IRS, News, Newsletter, Small Business, Tax Planning
If you use Venmo, PayPal, or CashApp to accept payments for freelance work, side gigs, or online sales, you’ll want to pay close attention to this year’s tax changes. New tax rules are making it harder to fly under the radar, even if you only earn a few thousand dollars on the side. Here’s what you need to know to stay compliant and avoid costly surprises next year.
Why the IRS Changed the Rules
In recent years, the rise of freelance and gig work and online selling has presented challenges for the IRS in tracking taxable income. To close this gap and improve transparency, the IRS lowered the reporting threshold for third-party payment platforms.
Previously, platforms like PayPal only had to issue Form 1099-K if you earned over $20,000 and had more than 200 transactions in a calendar year. Originally, the IRS planned a $600 threshold in total payments for goods or services to trigger the reporting requirement, but revisions to the new rules now include a phase-in period as follows:
- 2024: If you received $5,000 or more in business-related payments, payment platforms automatically sent a 1099-K.
- 2025: You will only need to earn $2,500 to receive a 1099-K.
- 2026: The originally planned $600 in total payments—regardless of the number of transactions— will take effect.
This change is part of a broader effort to ensure platforms and users have time to adjust, but by 2026, even small side gigs could trigger a tax form.
What Types of Payments Are Taxable?
The IRS is not interested in your birthday gifts or splitting brunch with friends. However, earned income for goods or services paid through PayPal, Venmo, or CashApp is taxable and must be reported. Examples include:
- Freelance services or contract work
- Tutoring
- Online product sales
- Crafts or handmade items
- Side jobs like dog walking or delivery driving
Not taxable:
- Personal gifts
- Reimbursements (e.g., a friend paying you back for concert tickets)
- Payments for shared expenses
To help avoid confusion, label your transactions clearly within the app whenever possible.
Who Needs to Pay Attention
This change affects more people than you might expect. If you:
- Earn just a few thousand dollars freelancing
- Resell items online as a hobby or side hustle
- Pick up occasional gigs on platforms like TaskRabbit or Fiverr
…you could now receive a 1099-K and be expected to report that income.
Keep Business and Personal Transactions Separate
One of the best ways to stay organized and avoid a potential IRS headache is to use separate payment apps or accounts for personal and business use. For example, use one Venmo account for freelance payments and another for splitting rent or reimbursing friends. Mixing business and personal transactions can lead to confusion and inaccurate tax reporting.
What to Know About Form 1099-K
If you receive a 1099-K, it shows the gross amount you were paid—not your actual income after expenses. That means it doesn’t subtract your platform fees, it doesn’t account for refunds or chargebacks, and it doesn’t reflect your net profit. To report your income accurately, you must keep records of how much you actually earned, what you spent on business-related costs, and any fees charged by the platform. Use spreadsheets or accounting software to track income and expenses throughout the year, and save receipts for anything you plan to deduct.
What to Do If You Receive a 1099-K
If you get a 1099-K in January 2026, here’s what to do:
- Compare the reported amount to your own records. Make sure it only reflects business transactions.
- Report the income on your tax return. Use Schedule C if you’re a sole proprietor or freelancer.
- Deduct legitimate expenses. These may include supplies, platform fees, mileage, or home office costs.
- Work with a tax professional if you’re unsure how to handle it, especially if it’s your first time dealing with this form.
The bottom line is that the IRS is cracking down on unreported income in the gig economy. If you earn money through PayPal, Venmo, or CashApp, take steps now to organize personal and business transactions, keep detailed records, and prepare for tax time.
by Amanda O'Brien | Accounting News, Business Growth, News, Newsletter, Small Business
The U.S. Small Business Administration (SBA) has introduced a new program as part of its ‘Made in America’ initiative to boost domestic manufacturing and help small businesses expand. The initiative focuses on two critical areas: cutting regulatory red tape and expanding access to financing for small business owners.
Cutting $100 Billion in Regulatory Burden
The SBA’s initiative includes a $100 billion plan, led by its Office of Advocacy, to cut outdated regulations that limit small manufacturers’ growth and global competitiveness.
To ensure that small business owners have a voice in the process, the SBA has also introduced a Red Tape Hotline—a new channel for entrepreneurs and manufacturers to report excessive or unnecessary regulations directly. Business owners can share real-world examples of regulatory challenges and suggest changes that would streamline compliance without sacrificing safety or quality standards.
This feedback loop is essential for shaping future policies that truly reflect the needs of small businesses. For many manufacturers, fewer regulatory obstacles can lead to faster project timelines, reduced operating costs, and increased opportunities for innovation.
Expanded Loan Access for Manufacturing Growth
In addition to regulatory reform, the SBA is making it easier for small business owners to secure financing. The agency is revising loan eligibility guidelines and increasing flexibility regarding how funds can be utilized—especially for real estate, construction, and equipment investments. These changes aim to reduce the barriers many small manufacturers face when obtaining capital for expansion or facility upgrades.
Loan programs like the SBA 504 and 7(a) loans are expected to play a central role in this expansion. These programs already offer favorable terms for fixed-asset purchases, and the new initiative will streamline the application process while expanding eligibility to a broader range of business types and credit profiles.
Why It Matters for Small Business Owners
This initiative provides small manufacturers a timely opportunity to scale their operations and invest in long-term growth. Rising material costs, global competition, and ongoing supply chain issues have created an increasingly complex environment for small business owners. By reducing regulatory hurdles and increasing access to capital, the SBA empowers manufacturers to invest in automation, expand their facilities, and create more U.S.-based jobs.
The initiative also reflects a broader push toward reshoring American manufacturing—a trend that gained momentum during the pandemic and continues to shape economic policy. With increased tools and support from the federal government, small businesses are better positioned to lead that movement.
How to Take Advantage
If you’re a small business owner in the manufacturing space, now is a good time to evaluate your financing needs and explore long-term investments. You can:
- Contact your local SBA district office or lending partner to learn about new loan opportunities
- Submit feedback through the Red Tape Hotline to help shape smarter regulations
- Explore SBA-backed loan options like the 504 or 7(a) program for equipment or facility upgrades
As the SBA continues to roll out this initiative, staying informed and proactive could mean new growth opportunities and fewer administrative challenges in the future.
by Amanda O'Brien | Accounting News, News, QuickBooks
When choosing whether to invest in a desktop or online QuickBooks product, we would suggest you evaluate three differences in the products.
1. Accessibility
If you want the option to access your QuickBooks file from anywhere with internet connection, you will want QuickBooks Online (QBO). If you prefer to have your file on one laptop or computer in your office, you may want the desktop product.
- If you use an Apple computer, you will want QBO since Intuit has discontinued the Mac product. If you are on a PC, you may want to use a desktop product.
- If you need more than five users in the file at one time, you may want QuickBooks Online. If you need less than five users in the file at one time, you may prefer the desktop product.
- If you want your accountant to have the ability to access your file to make changes or consult at any time throughout the year, you may prefer QBO. If you only need to get your accountant a file quarterly or annually, you may prefer the desktop product.
2. Appearance
The interface and processes of the two products are significantly different. They can both perform the same tasks, but the process of performing those tasks requires different procedures. Learning new processes can be a little difficult, so we suggest you stick with the product with which you are more comfortable.
3. Payment for Product
Last, there is a difference in the way you pay for your QuickBooks product. To purchase the QuickBooks desktop product is a one-time fee. We do suggest that every three years you upgrade your product because Intuit regularly sunsets old products. QBO is a monthly subscription that is continually updated and supported by Intuit.
Overall, both QuickBooks products are great to use. If you need help selecting which product better suits your needs, we would be happy to assist you in making the decision.
by Amanda O'Brien | Accounting News, News, QuickBooks, Resources
Summer is the perfect time to get your QuickBooks cleaned up. MKR provides hands-on training and consultation services for QuickBooks during this time of year. It is our pleasure to conduct an on-site visit to assist with any questions or concerns you have in working with your QuickBooks file(s).
We provide consultation by using our accountants’ tools. These tools can help reconcile bank accounts, troubleshoot payroll and bank imports, correct accounts receivable and accounts payable, and update inventory. We provide full-service training if you are new to the QuickBooks software, or partial-service training if you have been using QuickBooks but need assistance with just one area.
Our training is customized to your needs and your business. We walk through what you need from your QuickBooks and customize the best way for you to achieve those goals with your software. With QuickBooks products constantly changing, we are here to keep you updated on the modifications for your software. Now is the perfect time to take advantage of the assistance we provide, so that come tax time you are ready. Please do not hesitate to call!
We have three certified QuickBooks ProAdvisors. Learn more about what they can do.
by Amanda O'Brien | News, QuickBooks, Resources
QuickBooks, created by intuit, is an accounting software that many businesses use to track their financial information including invoices, bills, paychecks, and inventory. To become a certified QuickBooks ProAdvisor, one must complete a series of comprehensive tests to show their knowledge and skills with the QuickBooks software. Here at MKR CPA’s we have three certified QuickBooks ProAdvisors: Jean Miller, Amanda O’Brien, and Tiffany Evans.
Jean Miller has been a certified QuickBooks ProAdvisor since 2006. She is the manager of the accountants in the office and she has worked in the accounting industry for 34 years. She is certified on QuickBooks Desktop and QuickBooks Online. In our office she is our inventory and payroll specialist, and works on time consuming corrections, data reviews, and consultations. She just recently acquired her Advanced Desktop Certification.
Amanda O’Brien has been a certified QuickBooks ProAdvisor since 2011. She is a staff accountant and has worked in the accounting industry for 8 years. She is certified on QuickBooks Desktop and advance certified on QuickBooks Online. In our office she specializes in QuickBooks Online and QuickBooks for Mac. She works with, but not limited to, veterinary companies, nonprofits, and service-based companies. She also just recently acquired her Advanced Desktop Certification.
Tiffany Evans has been a certified QuickBooks ProAdvisor since 2012. She is a staff accountant and has worked in the accounting industry for 5 years. She is certified on QuickBooks Desktop and QuickBooks Enterprise. In our office she specializes in bookkeeping services and QuickBooks Enterprise. She works with, but not limited to, hardware companies, real estate investors, and product and inventory driven companies. She just recently acquired her Advanced Desktop Certification as well.
Is your QuickBooks ready for a cleaning? Learn about the tools to help you clean your QuickBooks.
