Do you live in the fine states of Massachusetts or Vermont?
Are you a freelancer, self-employed person, or otherwise do business online?
Do you take payments through any sort of online micropayment system (PayPal, Square, etc)?
Things are weird this year.
Those two states passed a little-known law that took effect in 2017 that requires all micropayment systems to issue a 1099-K for “business profits” of more than $600 and report it to the state.
So if you do any sort of business online, be aware that everything you did on PayPal (or Square, etc) is being itemized and reported to the state, and unless you spell out on your taxes whether the money going in and out of PayPal was business or personal, they’ll assume it’s all business income and you’re on the hook for it. They expect you to itemize it month-by-month along with the 1099-K you received (and probably threw away, thinking it was junk mail).
