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. |
Ok, smart guy. Tell me what form and line number this is then. |
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. |
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 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? |
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. |
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. |
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. |
Your neighbor is either stupid or a douche |
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. |
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. |
All people have to do is flag their transactions as payments between friends. Not hard. |
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. |
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 |