(NewsNation) — After years of using services like PayPal and Venmo largely tax-free, a change from Congress means millions more people might get an IRS form in 2023.

A 1099-K is an income report form that deals with payment cards or third-party network transactions. Translation: Credit cards and services that receive money from someone else and give it to you.

Here’s what Congress changed, what it means, and why the form may not be right.

History of the 1099-K

Before the 2022 tax year, the 1099-K was a way for independent contractors to report their earnings. These professionals, who include “gig workers” such as Uber drivers, don’t get a W2 form since they are not full-time employees of the organization paying them.

The key is a 1099-K would only be triggered if someone made at least $20,000 over 200 transactions. Continuing the Uber example, that would mean the driver collected $20,000 over at least 200 rides.

Changes from Congress

In 2021, Congress expanded the reporting requirements of the 1099-K form to include settlement entities such as Venmo, PayPal, Cash App, etc. Lawmakers said it was to make sure taxable income was not slipping through the cracks.

They also reduced that $20,000 over at least 200 transactions threshold to $600 over at least one transaction.

In short, a lot more people can expect 1099-K forms from Venmo and services like it. It begins in the 2022 tax year, meaning the first forms will go out in the early weeks of 2023.

Let’s say you start a lawn-mowing business on the side. You charge $30 per cut, and to make things easier for your clients, you tell them to send you the money through Venmo.

It was a busy year — you cut five lawns per weekend over 20 weekends, which comes out to a cool $3,000. That flies well below the old reporting standard, but now Venmo is obligated to hand you a 1099-K form because it has paid you more than $600.

Technically, a “side hustle” always represents taxable income. The IRS is now looking for it harder.

Is there anything I can do?

First of all, you should know that just because it’s on a 1099-K form doesn’t mean it’s taxable income.

If you sell something at a loss, you do not have to report the proceeds. For example, let’s say you just bought a new dining room set, but need to toss your old one to make room. If you sell it on Venmo for $600, but that’s less than what you bought it for, you can ask Venmo to issue a correction.

Gifts or reimbursements are also not taxable, but may trigger a 1099-K in aggregate. You should reach out to the organization that gave you the 1099-K to clear it up.

Unfortunately, clearing it up may also involve trying to speak with the IRS directly. As of the spring of 2022, they are able to answer around 20% of the calls they receive because of staffing and logistical problems.

Also, independent contractors may accidentally double-report their incomes if they’re not careful. Let’s say you’re a wedding photographer who takes payment by Venmo. As you prepare your taxes, you will likely already declare your earnings as income, and the 1099-K may appear as extra, even if it’s for the same payment.

Are any services exempt?

All payment processing services are included in Congress’ change. However, transactions between banks are exempt. As such, Zelle is a way to avoid these new regulations.

Zelle is a messaging service that instructs banks on where to send money. It never holds money itself. Therefore, reimbursing your roommates with Zelle will avoid triggering a 1099-K.

Also, there’s always cold, hard cash.

That said, it’s illegal to hide taxable income. The wedding photographer and amateur landscaper in the examples above should still tell the IRS about the money they made even if their clients pay them via Zelle or cash.