So people will be taxed on venmo and zelle transactions?

Anonymous
My ex pays child support by Zelle. Am I going to have to pay taxes on that now????
Anonymous
Anonymous wrote:My ex pays child support by Zelle. Am I going to have to pay taxes on that now????


No. The method of payment doesn't change whether taxes are owed or not.
Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:I received about $1000 for a large Fourth of July party from several family members and put it all towards the food and drinks. Will this be taxed?


No. Nothing has changed regarding what's taxable income.


That doesn't mean anything. You think PayPal, Venmo, etc. are going to figure out why you received $1000+? No, they're just going to report it to the IRS, send you the 1099, anyway, no you'll be forced to prove you received $1000 to pay for a BBQ party. Pain.in.the.ass. we all know the govt will overzealous with their new army of IRS agents and try to argue and nauseum with people over proving that they received the money to pay for expenses. Ridiculous.


So much wrong with this reply.

1) It's not going to be a pain in the ass. There will be a line where you report whatever number is on the 1099 but then probably a line in which you offset or claim it's exempt or whatever. You only have to explain if you get audited. You probably won't get audited.

2) There's no "new army of IRS agents" with which you have to "argue." I suspect you are alluding to the hiring of new agents over the next decade to replace attrition of rank-and-file employees. It's not like they're all auditors, not even close, and all that's going to is staff the IRS at levels it should have been all along. So, stop with the inflammatory language.


Where is this line where I offset the 1099 income or claim it is exempt? Hint: it doesn't exist. If you get a 1099 that is wrong, and can't get the issuer to correct it, then your only option is to attach a statement to your return. Even if you do that, you will probably get an adjustment notice from the IRS and then you'll have to write them a bunch of letters trying to convince them that the 1099 is wrong.



NP. It's on your tax forms that you use to file. Not the 1099. You probably shouldn't be posting about things you know nothing about.

Guys, this is going to be similiar to 529s. All 529 distributions get reported as qualified distributions, whether you use the money for education or not. It is up to you to report it the correct way. If you don't, the only way the IRS finds out is if you are audited. This isn't hard.


Indeed. This is a classic example of right-wing fearmongering and misinformation, using the IRS as a scapegoat and straw man. Hence the references to the IRS "army" of auditors and making people fearful they'll be aggressively audited for using Venmo.

These things aren't going to happen, except in the fantasy world spun by right-wingers and the heads of the gullible followers.


Ok, smart guy. Tell me what form and line number this is then.
Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:I received about $1000 for a large Fourth of July party from several family members and put it all towards the food and drinks. Will this be taxed?


No. Nothing has changed regarding what's taxable income.


That doesn't mean anything. You think PayPal, Venmo, etc. are going to figure out why you received $1000+? No, they're just going to report it to the IRS, send you the 1099, anyway, no you'll be forced to prove you received $1000 to pay for a BBQ party. Pain.in.the.ass. we all know the govt will overzealous with their new army of IRS agents and try to argue and nauseum with people over proving that they received the money to pay for expenses. Ridiculous.


So much wrong with this reply.

1) It's not going to be a pain in the ass. There will be a line where you report whatever number is on the 1099 but then probably a line in which you offset or claim it's exempt or whatever. You only have to explain if you get audited. You probably won't get audited.

2) There's no "new army of IRS agents" with which you have to "argue." I suspect you are alluding to the hiring of new agents over the next decade to replace attrition of rank-and-file employees. It's not like they're all auditors, not even close, and all that's going to is staff the IRS at levels it should have been all along. So, stop with the inflammatory language.


Where is this line where I offset the 1099 income or claim it is exempt? Hint: it doesn't exist. If you get a 1099 that is wrong, and can't get the issuer to correct it, then your only option is to attach a statement to your return. Even if you do that, you will probably get an adjustment notice from the IRS and then you'll have to write them a bunch of letters trying to convince them that the 1099 is wrong.



NP. It's on your tax forms that you use to file. Not the 1099. You probably shouldn't be posting about things you know nothing about.

Guys, this is going to be similiar to 529s. All 529 distributions get reported as qualified distributions, whether you use the money for education or not. It is up to you to report it the correct way. If you don't, the only way the IRS finds out is if you are audited. This isn't hard.


I realize that. I have prepared my taxes for a long time. Please tell me what form number and line number this is. TYA.


Well, you will only receive the 1099-K from Venmo (or whoever) if you receive a payment for goods and services (NOT A PAYMENT FROM FAMILY & FRIENDS) therefore, you would be reporting that as income as you always have, either on your Schedule 1, Schedule C, or whatever form you use based on how your business has been established.

You're welcome.
Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:I received about $1000 for a large Fourth of July party from several family members and put it all towards the food and drinks. Will this be taxed?


No. Nothing has changed regarding what's taxable income.


That doesn't mean anything. You think PayPal, Venmo, etc. are going to figure out why you received $1000+? No, they're just going to report it to the IRS, send you the 1099, anyway, no you'll be forced to prove you received $1000 to pay for a BBQ party. Pain.in.the.ass. we all know the govt will overzealous with their new army of IRS agents and try to argue and nauseum with people over proving that they received the money to pay for expenses. Ridiculous.


As long as you list that transaction as "friends and family", you will not receive a 1099 for those reimbursements.

Also, while I can't prove this, I think both the services and the IRS are going to be pretty lenient about one time payments. I think what this shift is really designed to capture is regular payments that are CLEARLY income. So a one time payment, even a large one, is unlikely to get flagged (unless you are dumb and categorize it as "goods and services"). But any regular payments of the same amount between two parties are going to get scrutiny. So unless you are throwing a neighborhood BBQ every month and getting reimbursed in a single lump sum on the 15th of every month, no one is going to ask you to explain anything about that event. Ever. You can calm down now.


The problem is that it is the payer, not the payee, that tags the transaction. There are billions of payments each year over these platforms. Many payers will choose the wrong tag and then the payees will be stuck. I don't share your optimism that the IRS will be lenient for one-time payments, at least on the front end. The IRS's systems are set up to do form matching. That means they compare all the W-2s, 1099s, K-1s, etc. for your social with what's on your return. When they don't match, they adjust your tax and send you a letter. It's all automatic. The taxpayer is then going to have to send the IRS a letter explaining why the 1099 is wrong. Going through all those letters is going to be enormously burdensome for both the taxpayers an the IRS.


The reason they will be "lenient" about one time payments is that there are too many of them to track. And if the payments are under $600, they won't even look at them. So even that $1000 BBQ example? It would only get flagged if you were being reimbursed $1000 from one person -- if it was a bunch of people sending $100-200, I don't think the system would even register this as an issue.

Maybe I'm wrong and a bunch of people will suddenly get 1099s for transactions that are obviously reimbursements. But if that happens, it will be a huge deal and covered extensively in the media. It's very much not in the IRS's interest to be overzealous about this, especially as they refine their approach. My expectation is that they will go after the obvious tax evaders first, and those will be pretty easy to identify -- anyone receiving regular payments of the same or similar amount via these services and not reporting that amount on their taxes. Especially if they are collecting more than $600 a year form the same source. That's a huge red flag. I very much support the IRS in trying to address this because tax evasion is a genuine problem in this country and no one should be allowed to just exempt themselves from the tax system.

I've also heard some young people talking about this almost gleefully. Like "oh yeah I make a ton doing dog walking on the side and it's great because it's like an extra 8k a year tax free." I think it's been normalized for many people who grew up with both gig culture and these apps that the money you get for side gigs via Venmo or whatever is under the table. If it was $800 babysitting on the weekends, I wouldn't care. But these are people making real money and simply not paying taxes on it. That's money for schools, roads, food safety, etc. We need to collect it.
Anonymous
I never gave venmo my SSN, and they limited my account so all I can do is transfer money into my bank account, and all payments have to go from my bank account (vs. using money that is in venmo to pay other people, for example)

I'm assuming that means I won't get a 1099 from venmo, since the bank eventually gets all money, right?
Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:I received about $1000 for a large Fourth of July party from several family members and put it all towards the food and drinks. Will this be taxed?


No. Nothing has changed regarding what's taxable income.


That doesn't mean anything. You think PayPal, Venmo, etc. are going to figure out why you received $1000+? No, they're just going to report it to the IRS, send you the 1099, anyway, no you'll be forced to prove you received $1000 to pay for a BBQ party. Pain.in.the.ass. we all know the govt will overzealous with their new army of IRS agents and try to argue and nauseum with people over proving that they received the money to pay for expenses. Ridiculous.


As long as you list that transaction as "friends and family", you will not receive a 1099 for those reimbursements.

Also, while I can't prove this, I think both the services and the IRS are going to be pretty lenient about one time payments. I think what this shift is really designed to capture is regular payments that are CLEARLY income. So a one time payment, even a large one, is unlikely to get flagged (unless you are dumb and categorize it as "goods and services"). But any regular payments of the same amount between two parties are going to get scrutiny. So unless you are throwing a neighborhood BBQ every month and getting reimbursed in a single lump sum on the 15th of every month, no one is going to ask you to explain anything about that event. Ever. You can calm down now.


The problem is that it is the payer, not the payee, that tags the transaction. There are billions of payments each year over these platforms. Many payers will choose the wrong tag and then the payees will be stuck. I don't share your optimism that the IRS will be lenient for one-time payments, at least on the front end. The IRS's systems are set up to do form matching. That means they compare all the W-2s, 1099s, K-1s, etc. for your social with what's on your return. When they don't match, they adjust your tax and send you a letter. It's all automatic. The taxpayer is then going to have to send the IRS a letter explaining why the 1099 is wrong. Going through all those letters is going to be enormously burdensome for both the taxpayers an the IRS.


The reason they will be "lenient" about one time payments is that there are too many of them to track. And if the payments are under $600, they won't even look at them. So even that $1000 BBQ example? It would only get flagged if you were being reimbursed $1000 from one person -- if it was a bunch of people sending $100-200, I don't think the system would even register this as an issue.

Maybe I'm wrong and a bunch of people will suddenly get 1099s for transactions that are obviously reimbursements. But if that happens, it will be a huge deal and covered extensively in the media. It's very much not in the IRS's interest to be overzealous about this, especially as they refine their approach. My expectation is that they will go after the obvious tax evaders first, and those will be pretty easy to identify -- anyone receiving regular payments of the same or similar amount via these services and not reporting that amount on their taxes. Especially if they are collecting more than $600 a year form the same source. That's a huge red flag. I very much support the IRS in trying to address this because tax evasion is a genuine problem in this country and no one should be allowed to just exempt themselves from the tax system.

I've also heard some young people talking about this almost gleefully. Like "oh yeah I make a ton doing dog walking on the side and it's great because it's like an extra 8k a year tax free." I think it's been normalized for many people who grew up with both gig culture and these apps that the money you get for side gigs via Venmo or whatever is under the table. If it was $800 babysitting on the weekends, I wouldn't care. But these are people making real money and simply not paying taxes on it. That's money for schools, roads, food safety, etc. We need to collect it.


This isn't new and exclusive to young people. The only thing that's new is that instead of cash, people are paying electronically. But being paid under the table has been around for years.
Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:I received about $1000 for a large Fourth of July party from several family members and put it all towards the food and drinks. Will this be taxed?


No. Nothing has changed regarding what's taxable income.


That doesn't mean anything. You think PayPal, Venmo, etc. are going to figure out why you received $1000+? No, they're just going to report it to the IRS, send you the 1099, anyway, no you'll be forced to prove you received $1000 to pay for a BBQ party. Pain.in.the.ass. we all know the govt will overzealous with their new army of IRS agents and try to argue and nauseum with people over proving that they received the money to pay for expenses. Ridiculous.


So much wrong with this reply.

1) It's not going to be a pain in the ass. There will be a line where you report whatever number is on the 1099 but then probably a line in which you offset or claim it's exempt or whatever. You only have to explain if you get audited. You probably won't get audited.

2) There's no "new army of IRS agents" with which you have to "argue." I suspect you are alluding to the hiring of new agents over the next decade to replace attrition of rank-and-file employees. It's not like they're all auditors, not even close, and all that's going to is staff the IRS at levels it should have been all along. So, stop with the inflammatory language.


Where is this line where I offset the 1099 income or claim it is exempt? Hint: it doesn't exist. If you get a 1099 that is wrong, and can't get the issuer to correct it, then your only option is to attach a statement to your return. Even if you do that, you will probably get an adjustment notice from the IRS and then you'll have to write them a bunch of letters trying to convince them that the 1099 is wrong.



NP. It's on your tax forms that you use to file. Not the 1099. You probably shouldn't be posting about things you know nothing about.

Guys, this is going to be similiar to 529s. All 529 distributions get reported as qualified distributions, whether you use the money for education or not. It is up to you to report it the correct way. If you don't, the only way the IRS finds out is if you are audited. This isn't hard.


I realize that. I have prepared my taxes for a long time. Please tell me what form number and line number this is. TYA.


Well, you will only receive the 1099-K from Venmo (or whoever) if you receive a payment for goods and services (NOT A PAYMENT FROM FAMILY & FRIENDS) therefore, you would be reporting that as income as you always have, either on your Schedule 1, Schedule C, or whatever form you use based on how your business has been established.

You're welcome.


You are deliberately avoiding the question. The issue is, what happens if you get a 1099 because someone incorrectly tagged a transaction as "goods or services." You claimed there was a line where you could just offset that. There is not.
Anonymous
It's going to be a mess for a lot of people. For example, if you split the cost of a hotel room, gas, tickets or meals with friends - will it be reported as income?
If you sell a sofa for $600 but you paid $2000 originally but you don't have the receipt anymore? Wedding gifts? Roommates splitting utility bills?

Sadly Venmo will not be practical for most people.
Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:The only transactions being reported are the ones where you select you are paying for “goods and services”. If you select you are just sending to friends or family, it is not being reported.


I don’t have that option on Venmo…?


There must be an option for goods and services because my neighbor sent me money for my teen doing yard work and a percentage was taken out. It said something like ‘services’ in the transaction. I don’t know where that option is though.

Your neighbor is either stupid or a douche
Anonymous
Yi think it’s only if it’s flagged as business. I allowed someone to use my beach house for only the cleaning fee. Instead of sending me the money as friend to friend he freaking flagged it as a business transaction. Not only die venmo take a slice now I’m gonna get a freaking 1099.
Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:I received about $1000 for a large Fourth of July party from several family members and put it all towards the food and drinks. Will this be taxed?


No. Nothing has changed regarding what's taxable income.


That doesn't mean anything. You think PayPal, Venmo, etc. are going to figure out why you received $1000+? No, they're just going to report it to the IRS, send you the 1099, anyway, no you'll be forced to prove you received $1000 to pay for a BBQ party. Pain.in.the.ass. we all know the govt will overzealous with their new army of IRS agents and try to argue and nauseum with people over proving that they received the money to pay for expenses. Ridiculous.


So much wrong with this reply.

1) It's not going to be a pain in the ass. There will be a line where you report whatever number is on the 1099 but then probably a line in which you offset or claim it's exempt or whatever. You only have to explain if you get audited. You probably won't get audited.

2) There's no "new army of IRS agents" with which you have to "argue." I suspect you are alluding to the hiring of new agents over the next decade to replace attrition of rank-and-file employees. It's not like they're all auditors, not even close, and all that's going to is staff the IRS at levels it should have been all along. So, stop with the inflammatory language.


Where is this line where I offset the 1099 income or claim it is exempt? Hint: it doesn't exist. If you get a 1099 that is wrong, and can't get the issuer to correct it, then your only option is to attach a statement to your return. Even if you do that, you will probably get an adjustment notice from the IRS and then you'll have to write them a bunch of letters trying to convince them that the 1099 is wrong.



NP. It's on your tax forms that you use to file. Not the 1099. You probably shouldn't be posting about things you know nothing about.

Guys, this is going to be similiar to 529s. All 529 distributions get reported as qualified distributions, whether you use the money for education or not. It is up to you to report it the correct way. If you don't, the only way the IRS finds out is if you are audited. This isn't hard.


I realize that. I have prepared my taxes for a long time. Please tell me what form number and line number this is. TYA.


Well, you will only receive the 1099-K from Venmo (or whoever) if you receive a payment for goods and services (NOT A PAYMENT FROM FAMILY & FRIENDS) therefore, you would be reporting that as income as you always have, either on your Schedule 1, Schedule C, or whatever form you use based on how your business has been established.

You're welcome.


You are deliberately avoiding the question. The issue is, what happens if you get a 1099 because someone incorrectly tagged a transaction as "goods or services." You claimed there was a line where you could just offset that. There is not.


You can use Line Z on your Schedule 1 under Additional Income for "other adjustments". But really, you shouldn't be listing the number as income if it isn't income. That doesn't make any sense. If it gets reported incorrectly, you get a corrected form.
Anonymous
Anonymous wrote:It's going to be a mess for a lot of people. For example, if you split the cost of a hotel room, gas, tickets or meals with friends - will it be reported as income?
If you sell a sofa for $600 but you paid $2000 originally but you don't have the receipt anymore? Wedding gifts? Roommates splitting utility bills?

Sadly Venmo will not be practical for most people.


All people have to do is flag their transactions as payments between friends. Not hard.
Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:I received about $1000 for a large Fourth of July party from several family members and put it all towards the food and drinks. Will this be taxed?


No. Nothing has changed regarding what's taxable income.


That doesn't mean anything. You think PayPal, Venmo, etc. are going to figure out why you received $1000+? No, they're just going to report it to the IRS, send you the 1099, anyway, no you'll be forced to prove you received $1000 to pay for a BBQ party. Pain.in.the.ass. we all know the govt will overzealous with their new army of IRS agents and try to argue and nauseum with people over proving that they received the money to pay for expenses. Ridiculous.


As long as you list that transaction as "friends and family", you will not receive a 1099 for those reimbursements.

Also, while I can't prove this, I think both the services and the IRS are going to be pretty lenient about one time payments. I think what this shift is really designed to capture is regular payments that are CLEARLY income. So a one time payment, even a large one, is unlikely to get flagged (unless you are dumb and categorize it as "goods and services"). But any regular payments of the same amount between two parties are going to get scrutiny. So unless you are throwing a neighborhood BBQ every month and getting reimbursed in a single lump sum on the 15th of every month, no one is going to ask you to explain anything about that event. Ever. You can calm down now.


The problem is that it is the payer, not the payee, that tags the transaction. There are billions of payments each year over these platforms. Many payers will choose the wrong tag and then the payees will be stuck. I don't share your optimism that the IRS will be lenient for one-time payments, at least on the front end. The IRS's systems are set up to do form matching. That means they compare all the W-2s, 1099s, K-1s, etc. for your social with what's on your return. When they don't match, they adjust your tax and send you a letter. It's all automatic. The taxpayer is then going to have to send the IRS a letter explaining why the 1099 is wrong. Going through all those letters is going to be enormously burdensome for both the taxpayers an the IRS.


The reason they will be "lenient" about one time payments is that there are too many of them to track. And if the payments are under $600, they won't even look at them. So even that $1000 BBQ example? It would only get flagged if you were being reimbursed $1000 from one person -- if it was a bunch of people sending $100-200, I don't think the system would even register this as an issue.

Maybe I'm wrong and a bunch of people will suddenly get 1099s for transactions that are obviously reimbursements. But if that happens, it will be a huge deal and covered extensively in the media. It's very much not in the IRS's interest to be overzealous about this, especially as they refine their approach. My expectation is that they will go after the obvious tax evaders first, and those will be pretty easy to identify -- anyone receiving regular payments of the same or similar amount via these services and not reporting that amount on their taxes. Especially if they are collecting more than $600 a year form the same source. That's a huge red flag. I very much support the IRS in trying to address this because tax evasion is a genuine problem in this country and no one should be allowed to just exempt themselves from the tax system.

I've also heard some young people talking about this almost gleefully. Like "oh yeah I make a ton doing dog walking on the side and it's great because it's like an extra 8k a year tax free." I think it's been normalized for many people who grew up with both gig culture and these apps that the money you get for side gigs via Venmo or whatever is under the table. If it was $800 babysitting on the weekends, I wouldn't care. But these are people making real money and simply not paying taxes on it. That's money for schools, roads, food safety, etc. We need to collect it.


I haven't see these particular 1099s, but 1099s I have received don't include each separate transaction. They just sum up all of the money received from 1099 issuer during that year. As I understand it, you will get a 1099 from Venmo if all of your payments from Venmo tagged as goods and services are over $600. It's not just payments from one payer.
Anonymous
Anonymous wrote:
Anonymous wrote:No. It means the transactions will be reported, which means that if you are making money and that money is coming to you through Venmo you can no longer hide your income.

For example, my tenant pays the rent through Venmo. I’ve always reported the rental income, so Venmo reporting the same thing makes no difference to me.

If you’re not hiding your income, you’re fine. Are you a tax cheater?


NP and tax expert here.

The first two sentences are correct.

The third is unnecessarily inflammatory and hostile given the lack of understanding about tax and the amount of misinformation about how taxes and information reporting obligations work. It wasn't helpful. Being concerned about this doesn't mean someone is a tax cheat.

Bottom line is this is no different than a bank account, brokerage or mortgage company reporting information about your payments and interest income, etc. to the IRS. It's no different than a W2. All you have to do at tax time is account for the cash flow on Venmo (which may or may not be "income") when you do your tax return. It certainly adds complexity, but if you reconcile it properly, it's not big deal. PP's flip comment aside, if you've been selling something on Etsy and accumulating money on Venmo and never putting it in your bank account and not reporting that income to the IRS on Schedule C or as hobby income, you will need to start doing that. But if you're just a passthrough for, say, your kids' travel team and the money you're collecting pays for team tournaments and uniforms or whatever, you just show the expense side of things and have no net income.

It's just reporting cash flow. That's all.

Being wary of this doesn't necessarily equal being a tax cheat, pp. Shame on you.


NP. How is it all going to be done? I use two banks, only one sends me the 1099 int which I report; I don’t get anything from the other one so I don’t (there is no tax form generated etc)
I have a number of transactions on PayPal and about 1/10 of them is rewards from market research companies. Not even sure that’s income? But not reimbursement either
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