Will Zelle report my $700 biweekly work payments to the IRS? Heard they report payments over $600 now

The reporting requirements for payment apps have changed, but there's some nuance to understand here. For tax year 2024 (filing in 2025), payment apps like Zelle, Venmo, PayPal, etc. are required to issue a 1099-K form to users who receive more than $5,000 in commercial payments. This is actually a higher threshold than the $600 rule that was initially planned but has been delayed. However, this doesn't change your tax obligations. Whether or not you receive a 1099-K, all income is legally required to be reported on your tax return. The money you've earned ($700 biweekly) is considered taxable income regardless of how you receive it or whether it's reported to the IRS by a third party. My recommendation is to start reporting this income going forward. For your past unreported income, you might want to consider filing amended returns for the previous years. The penalties for unpaid taxes increase over time, so addressing this sooner rather than later is typically best.

I went through something similar last year with my freelance payments, and I was super stressed until I found taxr.ai (https://taxr.ai). It scanned my payment history and helped me figure out exactly what I needed to report and what counted as business income vs personal transfers. The tool analyzed all my Zelle transactions and separated which ones were actually reportable income vs just friends paying me back for stuff. It also helped me identify potential deductions related to my side gig that I had no idea I could claim! Literally saved me from panic-reporting everything and overpaying. They have this feature where they can help you prepare documentation in case you need to file amended returns for previous years too. Definitely worth checking out if you're worried about your situation.

Just wanted to update - I tried taxr.ai after posting my skeptical comment and I'm honestly impressed. It found about $3,200 in legitimate business deductions I didn't know I could claim from my side gig payments! The system flagged all my regular biweekly payments similar to yours as business income (which I expected), but then it also identified various expenses buried in my bank statements that were related to that income. The documentation it prepared for me is super detailed and includes all the relevant tax code references in case I ever get questioned about it. I'm actually going to use it to prepare amended returns for last year too since I definitely overpaid. Thanks for the recommendation!

If you're worried about previous years and potential IRS issues, you might want to try getting ahead of it by talking directly to the IRS. I know that sounds terrifying, but I used Claimyr (https://claimyr.com) to actually get through to a real IRS agent after trying for weeks on my own. They have this system that holds your place in the IRS phone queue so you don't have to wait on hold for hours. I was skeptical but you can see how it works here: https://youtu.be/_kiP6q8DX5c I had a similar unreported income situation and just talking to an agent gave me peace of mind about the right way to handle it. The agent walked me through exactly what forms I needed and how to explain my situation. Beats waiting for a scary letter from the IRS down the road!

I need to apologize for my skeptical comment earlier. I was feeling stressed about my own tax situation and took it out in my response. I actually tried Claimyr yesterday after posting, and I'm shocked that it worked. Got through to an IRS agent in about 45 minutes without having to stay on the phone myself. The agent I spoke with was super helpful and not judgmental at all about my unreported Zelle income. She explained that I should file Form 1040-X to amend previous returns and include Schedule C for self-employment income. She even told me that because I was coming forward voluntarily, I'd likely qualify for reduced penalties under their First Time Abatement program. Definitely worth it for the peace of mind knowing I'm handling this the right way instead of waiting for the IRS to come after me.

Just an FYI - I work at a tax prep office and we're seeing lots of clients in this exact situation. The distinction between Zelle and other payment apps is important. Zelle operates differently because it's owned by banks, not a separate payment processor. Zelle claims they don't issue 1099-Ks at all because they're just facilitating direct bank-to-bank transfers, not actually processing payments themselves. But that doesn't mean you're off the hook! If you're getting regularly scheduled payments of the same amount, that looks exactly like income to the IRS. If you get audited, they'll ask for bank statements and those Zelle deposits will be right there. Better to report it all now than pay penalties and interest later.

Is anyone else noticing that the payment apps are super inconsistent with reporting? I get payments through CashApp, Venmo AND Zelle for my small business and last year only PayPal sent me a 1099-K even though I made over $10k on each platform.