Spring Cleaning Your Finances: What to Know About 2025 Income Reporting
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As winter fades and spring gets into full swing, it’s the perfect time for a financial refresh. Along with decluttering closets and organizing garages, this season is ideal for gathering tax documents and preparing for the April 15 filing deadline (or October 15 if you file an extension).
One issue that continues to surprise taxpayers each year isn’t how much they made — it’s understanding what actually needs to be reported.
Here’s what you should know for the 2025 tax year.
The IRS Starts with a Broad Definition
Under the Internal Revenue Code, gross income includes “all income from whatever source derived” unless a specific law excludes it.
That includes:
- W-2 wages and bonuses
- Self-employment and contract income
- Interest and dividends
- Capital gains
- Rental income
- Business income
- Certain retirement distributions
- Debt forgiveness in some cases
No 1099? You May Still Need to Report It.
There are several versions of Form 1099 used to report different types of income:
- 1099-NEC – Non-employee compensation (generally issued if you were paid $600 or more as an independent contractor)
- 1099-INT – Interest income
- 1099-DIV – Dividend income
- 1099-MISC - Certain other payments
Here’s the important rule:
You are responsible for reporting taxable income whether or not you receive a tax form.
Tax forms are informational tools that help the IRS match income, but they do not determine whether income is taxable. If your bank paid you $75 in interest and you didn’t receive a 1099-INT, you still must report that income.
Digital Payments and Side Hustles: 2025 1099-K Rules
Many taxpayers have questions about income received through payment apps or online platforms. For the 2025 tax year (returns filed in early 2026), the federal reporting threshold for Form 1099-K has reverted to the long-standing rule:
A third-party settlement organization (such as PayPal, Venmo, Etsy, or similar platforms) must issue a 1099-K only if you exceed both:
- $20,000 in gross payments, and
- More than 200 transactions during the calendar year
If you do not meet both thresholds, you may not receive a 1099-K. However — and this is critical —
All taxable income must still be reported, even if you don’t receive a 1099-K.
The reporting threshold determines when a platform must send a form. It does not determine whether the income is taxable.
If you operate a side business, sell products online, provide freelance services, or receive business payments through an app, that income is generally reportable regardless of whether a form is issued.
Crowdfunding: Gift or Taxable Income?
Crowdfunding platforms have become common tools for raising money for medical bills, emergencies, or personal causes. In many cases, funds received through crowdfunding are treated as non-taxable gifts — but only if certain conditions are met. Funds are generally considered gifts (and not taxable to the recipient) when:
- Donors receive nothing of value in return
- Contributions are made out of detached generosity
- The funds are not compensation for services
Funds may be taxable if:
- Contributors receive goods or services in exchange
- The campaign resembles a business activity
- An employer contributes to an employee’s fundraiser (typically treated as taxable compensation)
Additionally, a donor may claim a charitable deduction only if the contribution is made to a verified 501(c)(3) nonprofit — not to an individual’s personal fundraiser.
Because the facts and circumstances matter, crowdfunding situations can quickly become complex. Good recordkeeping — and professional guidance — is important.
A Fresh Start for the Season
Spring is about renewal — and your financial plan deserves the same attention.
As you review last year’s income, make sure you consider:
- Contract and freelance work
- Online sales
- Investment income
- Rental activity
- Digital payment platforms
- One-time or informal jobs
Nearly every household has at least one income source beyond traditional wages. Understanding reporting requirements ahead of time can help prevent surprises, penalties, and unnecessary stress. If you have questions about how the 2025 rules apply to your situation, Savvy is here to help you move forward with clarity and confidence this season.
Jonathon Merickel has always loved helping people accomplish their goals. He believes financial advising is unique in that it allows him to work with individuals and families across every stage of life, from early accumulation years to retirement and beyond. Over the years, Jonathon has seen firsthand how life rarely goes exactly according to plan. That’s why he believes great financial planning must be flexible, personal, and grounded in real human experience. His role is to help clients navigate both planned milestones and unexpected changes with confidence and clarity. In addition to working with clients, Jonathon is actively involved in the financial planning community and currently serves as a Board Member of FPA Illinois, supporting the profession and its future.
Material prepared herein has been created for informational purposes only and should not be considered investment advice or a recommendation. Information was obtained from sources believed to be reliable but was not verified for accuracy. It is important to note that federal tax laws under the Internal Revenue Code (IRC) of the United States are subject to change, therefore it is the responsibility of taxpayers to verify their taxation obligations.
Jonathon Merickel is an investment adviser representative with Savvy Advisors, Inc. (“Savvy Advisors”). Savvy Advisors is an SEC registered investment advisor. The views and opinions expressed herein are those of the speakers and authors and do not necessarily reflect the views or positions of Savvy Advisors. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy.
