Venmo users, what do the new tax regulations mean for you?
As of January 2022, the IRS now requires reporting of payments for goods and services exceeding $600 in a calendar year. Anyone who receives $600 or more in payments for goods and services through Venmo (or any other payment app) can expect to receive a Form 1099-K with their year-end tax documents. Please note that this new reporting requirement does not apply to transactions between family and friends. This only affects payments received for goods and services. Senders can tag a purchase as “goods and services”, which protects both the buyer and seller in case something goes wrong.
If these new regulations do pertain to you, it’s important that you confirm your tax information in your Venmo account. If you fail to do this, and the payments that you receive reach $600, your subsequent payments will be placed on hold in your account until your tax information is confirmed.
Feel free to contact us with any tax questions.