The IRS is increasing scrutiny on side hustle income, with 27% of American workers having some form of side income in 2025, but the median earner only making $200 a month. The agency has modernized operations with advanced tools to track all income, no matter how small. Gig workers must report any income above $400 a year, including earnings from ride sharing, property rentals, online sales, and freelance services. The IRS receives data from third parties, banks, and payment apps to track all transactions, making accurate reporting crucial to avoid penalties and deductions. Mixing personal and business finances can lead to tax nightmares, so it’s essential to keep them separate and set aside money for taxes as you earn.

Read more at Yahoo Finance: The IRS is cracking down on a type of income earned by millions of people. Here’s how to prevent a letter from Uncle Sam