Do You Have to Report Venmo Payments This Tax Season?

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Get paid through Venmo? Read on to see what your reporting obligations are this year for tax-filing purposes. [[{“value”:”

Whether you’re self-employed or run a small business, you may accept payments via apps like Venmo. Venmo and similar payment platforms can make it easier and quicker to get paid. Instead of waiting for a check to arrive in the mail that then needs to clear your bank account, you can instead receive payment on the spot.

Meanwhile, the IRS had previously announced changes to Venmo reporting that would impact 2023 tax returns. Those changes are now delayed another year — but that doesn’t actually change your income-reporting obligation.

You have to report all income you earn

The IRS was originally seeking to change the rules of third-party platform reporting to apply to 2023 returns. The current rules are that platforms like Venmo only have to issue a tax form, called a 1099-K, for users who earn more than $20,000 in a year across more than 200 individual transactions.

The IRS originally wanted to lower that threshold to $600 and remove the 200-transaction requirement for reporting purposes. It still plans to do so, only for 2024 tax returns — not the 2023 tax returns being filed this year.

However, the delay of this new reporting rule shouldn’t change anything for you as far as your income-reporting obligation goes. Any time you earn money, you have to tell the IRS about it — no matter how you’re paid.

So let’s say you were paid $2,000 across 10 Venmo transactions in 2023. You may not get a 1099 form from Venmo, but you still need to report your $2,000 in earnings. The only difference is Venmo’s obligation to send you a tax form.

As Mark Steber, Chief Tax Information Officer at Jackson Hewitt Tax Services, explains, “Despite last-minute changes to who will receive a 1099-K form this tax filing year, it’s likely that if you earned money and received it using Venmo or other third-party payment apps, that it needs to be reported on your federal income tax return. All income is taxable in the year it’s earned and should be reported on a tax return. Just because you don’t receive a 1099-K from Venmo because you don’t meet the current $20,000 threshold doesn’t mean that you don’t have to claim this money on your tax return.”

Don’t worry about Venmo payments that aren’t income

Many people use Venmo for personal transactions that have nothing to do with earning income. You may be in the habit of using Venmo to collect money for teacher gifts at your child’s school. Or you might sometimes use Venmo to split a check with friends at a restaurant.

Do rest assured that these aren’t transactions you have to report, and you won’t be taxed on them. If you and a friend rack up a $60 tab at a cafe and your friend sends you a Venmo payment for their $30 share, the IRS won’t get a piece of that money because it isn’t income.

Rather, you only have to report earnings for work you received via Venmo on your taxes. But again, this holds true no matter what your income-related payments amounted to in 2023. Make sure to follow the rules carefully so you don’t wind up reporting the wrong amount of earnings and getting audited or penalized by the IRS as a result.

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