H&R Block is urging gig workers and side hustlers to treat their work like a small business, as new tax reporting thresholds could significantly change how they’re classified and taxed.
A recent change to the 1099-K tax form means that people who earn $5,000 or more through third-party payment platforms like PayPal or Venmo are now considered small business owners under U.S. tax law. That’s a major shift from the previous threshold of $20,000, and it’s expected to impact millions of casual sellers and independent workers.
Despite the change, many are still unaware of the implications. A January 2025 study by H&R Block and Morning Consult found that nearly half of gig workers hadn’t heard about the new rules. Even after being informed, 50 percent said they were unclear on the details at the start of tax season.
Contest aims to boost legitimacy
In response, H&R Block launched the “Make It Legit” contest, a campaign to help gig workers transition into small business ownership. The contest is open until May 4 and will award three winners with professional services including business formation, year-round tax advice, and customized marketing materials such as logos, brand colors, and a commercial produced by a live film crew.
“Gig workers often do not see themselves as legitimate business owners, even though they are taxed as such,” said Wendy Fitch, vice president of brand, content, and insights at H&R Block. “We believe that if you’re getting taxed like a legit business, you should look like one, too.”
Spotlight on creative entrepreneurs
To illustrate the contest’s goals, H&R Block partnered with three unconventional content creators:
- @PicklePete112, who performs bagpipe music in a pickle costume at local events
- @DeadGregs, a culinary historian who revives historic recipes
- @InspireByTyler, a visual artist who uses synthetic hair to create 3D art
Each was given a full business makeover, including branding, tax assistance, and a custom commercial. Pickle Pete’s film is now live on H&R Block’s social media channels.
Closing the knowledge gap
H&R Block says many gig workers miss out on tax credits and deductions because they don’t view themselves as businesses. Fitch said the company’s goal is to help them operate more confidently and avoid leaving money on the table.
“With 70 years of tax expertise under our belt, we’ve helped countless individuals transition to small business owners,” she said. “We’re helping other pioneers benefit from their passions.”
