Tax season 2026 has officially arrived, and it brings a mix of relief and confusion. With the filing window now open (as of January 26), millions of Americans are navigating a landscape shifted by the “One Big Beautiful Bill Act” (OBBBA) passed last July. While this legislation introduced helpful changes—like a higher Child Tax Credit and reinstated reporting thresholds—it also created new traps for the unprepared.
The stakes are higher this year. Recent reports from the Taxpayer Advocate indicate that IRS staffing levels have dropped significantly, meaning customer service delays could be longer than usual. If you make a mistake on your 2025 return, you might be waiting months for a resolution.
Your goal is simple: File accurately, file electronically, and claim every dollar you are owed. To help you do that, we’ve identified the six most dangerous mistakes that could inflate your tax bill or delay your refund this season.
Mistake 1: Panicking Over Venmo & PayPal (The 1099-K Reversal)
For years, gig workers and online sellers braced for the IRS to lower the reporting threshold for third-party payment apps like Venmo, PayPal, and Cash App to $600. That fear caused unnecessary panic for people selling used furniture or splitting dinner bills.
Here is the good news: The new tax law officially reinstated the previous, higher threshold for the 2025 tax year. You should generally only receive a Form 1099-K if:
- You received over $20,000 in gross payments, AND
- You participated in more than 200 transactions.
The Mistake: Many taxpayers are still reporting non-taxable personal transactions (like a friend reimbursing you for pizza) as income because they are confused by the flip-flopping rules. Conversely, some real gig workers assume that if they didn’t get a 1099-K, they don’t owe taxes. Both assumptions are wrong.
The Fix:
- If you didn’t get a form: You still must report all taxable income from side hustles, even if it’s just $500. The law change only affects reporting requirements for the platforms, not your tax liability.
- If you did get a form in error: If you received a 1099-K for personal reimbursement, do not just ignore it. You may need to file a “zero adjustment” on your return to tell the IRS that this money was not income.
