KEY TAKEAWAYS

New tax rules lower the 1099-K reporting threshold for payment apps users.

Thresholds drop from $20,000 to $2,500 by 2025, reaching $600 by 2026.

Label transactions correctly to avoid IRS issues; personal transactions aren't taxable.

SALT LAKE CITY — In place of handing cash back and forth, people are using payment apps such as Venmo, Cash App and PayPal, among other money transfer apps. In fact, it's expected that 20% of financial transactions worldwide will be done through these apps.

But when you get money through such an app, the taxman is watching. So, how do you make sure the IRS won't come after you for taxes on a personal transaction between friends as opposed to a business transaction, such as money earned from a side hustle?

Liesl Einerson is a very busy mom o

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