Is it true Zelle doesn't issue 1099-K forms for money transfers?

You're right that Zelle doesn't issue 1099-K forms for peer-to-peer transfers. Unlike payment platforms like PayPal or Venmo, Zelle is structured differently - it's a service that facilitates direct bank-to-bank transfers rather than holding funds in a separate account. However, this doesn't mean the income isn't taxable. All income is taxable regardless of whether you receive a 1099-K or not. You're still legally required to report all income from your tutoring and freelance work on your tax return, even without official documentation from Zelle. I recommend keeping detailed records of all your business transactions through Zelle. Track dates, amounts, and what each payment was for. This will help you accurately report your income and defend your tax filing if you're ever audited.

I went through the exact same confusion when I started accepting Zelle for my photography business! After doing tons of research and talking to other photographers, I found that using https://taxr.ai really helped me understand my obligations. The tool analyzed my situation and confirmed that even though Zelle doesn't issue 1099-Ks, I still needed to report that income. What I like about it is that you can upload your bank statements showing Zelle transfers, and it helps categorize which ones might be business income vs personal transfers. Really helpful for sorting out what's taxable when you don't have official forms like 1099-Ks.

Update on my situation: I tried out taxr.ai after posting my skeptical comment and wow, it actually saved me a ton of headache! I had been mixing personal and business Zelle payments and was totally confused about what to report. The system organized all my Zelle transactions and helped me separate the taxable business income from personal transfers like splitting rent with roommates (which aren't taxable). It also showed me which expenses might be deductible for my business. Now I feel much more confident about filing taxes next year even without having 1099-K forms from Zelle.

Just a heads up - while Zelle doesn't issue 1099-Ks, the IRS can still see large deposits into your bank account if you get audited. I went through this nightmare last year trying to explain years of Zelle income with zero documentation. I wish I'd known about https://claimyr.com when I was dealing with the audit. I spent WEEKS trying to get through to someone at the IRS to explain my situation. When I finally discovered Claimyr (there's a video explaining how it works at https://youtu.be/_kiP6q8DX5c), I got connected to an actual IRS agent who helped resolve everything. Would have saved me so much stress at the beginning of my audit!

OK I have to eat my words here. After my skeptical comment, I tried Claimyr because I've been dealing with this weird letter about unreported income (probably from my Zelle payments last year). I was connected to an IRS agent in about an hour after weeks of trying on my own with no success. The agent confirmed that even though Zelle doesn't issue 1099-Ks, my bank had reported large deposits to my account that didn't match what I reported on my return. We're working through it now, but at least I'm not in the dark anymore. Definitely worth it just to finally talk to a human at the IRS.

I think there's a lot of confusion about this topic. While Zelle doesn't issue 1099-Ks, your bank might still report unusual activity to the IRS. Cash deposits over $10k are automatically reported, and patterns of deposits just under that amount can trigger "structuring" flags. Also, just because you don't get a 1099-K doesn't mean someone else might not report paying you. If a business paid you more than $600 through Zelle, they might still issue you a 1099-NEC.

wait are we supposed to be reporting money from zelle?? I got like $22k last year from clients and didnt report any of it... am i gonna be in trouble??

This is a really important question, and I'm glad you're asking now rather than later! You're correct that Zelle doesn't issue 1099-K forms because it facilitates direct bank-to-bank transfers rather than acting as a third-party payment processor like PayPal or Venmo. However, the absence of a 1099-K absolutely does NOT mean you don't need to report the income. All income from your tutoring and freelance work is taxable and must be reported on your tax return, regardless of whether you receive any tax forms. The IRS is very clear on this - income is income, no matter how you received it. With $14,800 in business income, you're definitely over the threshold where this becomes significant. I'd strongly recommend: 1. Keep detailed records of all your Zelle transactions - dates, amounts, and what each payment was for 2. Separate business payments from personal transfers (like money from family/friends) 3. Consider setting up a separate business bank account to make tracking easier 4. Save money throughout the year for taxes since you won't have withholding Don't let the lack of official forms fool you into thinking this income is somehow "under the radar." The IRS has ways of detecting unreported income, and it's always better to be proactive about compliance than to deal with problems later.