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.

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.

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…?

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.

Anonymous wrote:

Anonymous wrote:Right, very little of the money I'm receiving via Venmo is income -- usually it's someone paying me back for an expense I covered all of and then we split after the fact. That isn't taxable. How am I supposed to report it to the IRS?

That isn't reportable. It's for people that do things like tutoring or dog-walking that are getting paid by Venmo. I'm not sure how Venmo and the IRS determine what the money is being transferred for though. How do they know if it's just reimbursing a friend versus paying for a service?

Because they know what business accounts look like and if your venmo account looks like a business account and you aren't reporting the payments as income, it will be a red flag just like anything else the IRS considers suspicious.

Anonymous wrote:

Anonymous wrote:I think it became effective Jan 2022. So you can expect a 1099 from Venmo, PayPal, etc. in the next couple of months if you made over $600 on them this year.

I didn't, no small business here, but other people who have little side hustles will suffer. Although I see the point.

Doing by the book is not suffering. You pay tax because you are supposed to pay tax.

Anonymous wrote:Practically I think this is kind of a disaster. People who run small businesses have been using it as a tax cheat, but it’s going o be hard to distinguish between those people and the people that are collecting money for the class teacher gift or the shared summer rental or whatever. I’m not sure what the irs is going to do with all this information.

It's going to be incredibly easy because people splitting a summer rental aren't sending a large volume of payments through out the year. A business transaction history will have payments from a wide variety of different accounts not a few one time transactions.

Anonymous wrote:

Anonymous wrote:Right, very little of the money I'm receiving via Venmo is income -- usually it's someone paying me back for an expense I covered all of and then we split after the fact. That isn't taxable. How am I supposed to report it to the IRS?

That isn't reportable. It's for people that do things like tutoring or dog-walking that are getting paid by Venmo. I'm not sure how Venmo and the IRS determine what the money is being transferred for though. How do they know if it's just reimbursing a friend versus paying for a service?

They don't. Venmo is not collecting taxes for this. They will be reporting to the IRS. The burden is on you to report taxable income if there is such. Its the same if someone wrote you a check for 2k. The bank doesnt know if its income from you selling a sofa or a friend reimbursing you for a beach rental share.

It's only for payments tagged as "goods and services", so if you paid your dog walker as "friends and family" they will not get a 1099.

Anonymous wrote:This tax season is going to be a shitshow.

No, it isn’t. This means nothing. It’s actually very simple. If you were reimbursed via Venmo, you do nothing. If you are PAID for something through Venmo, you report it - but you always should have done that anyway.

Anonymous wrote:Right, very little of the money I'm receiving via Venmo is income -- usually it's someone paying me back for an expense I covered all of and then we split after the fact. That isn't taxable. How am I supposed to report it to the IRS?

That isn't reportable. It's for people that do things like tutoring or dog-walking that are getting paid by Venmo. I'm not sure how Venmo and the IRS determine what the money is being transferred for though. How do they know if it's just reimbursing a friend versus paying for a service?

Is it Zelle or just Venmo/PayPal. We pay a coach/club who stopped taking Venmo and just takes Zelle or cash. I was thinking it was for this reason.

I believe Zelle is not reporting to the IRS

https://www.cpapracticeadvisor.com/2022/11/18/zelle-is-being-used-by-small-business-owner/73295/#:~:text=But%20if%20you%20use%20third,in%20payments%20during%20the%20year.

This tax season is going to be a shitshow.

Also, If it isn't "income" but rather is a reimbursement or a gift, it doesn't magically become taxable because it passed through Venmo.