As of late, Venmo is used for a wide range of transactions. Although the app is designed for payments between friends and family as its primary use, many people now have business profiles on Venmo.
Furthermore, receiving payments for goods and services on Venmo is quick and convenient. But what happens when tax season comes around? Will Venmo send a 1099 form? This article will tell you all you need to know, so continue reading!
Will Venmo Send Me a 1099 Form In 2023?
If you have a business account on Venmo and you made $600 or more during the year, Venmo will report these earnings to the IRS and send you a 1099-K document in 2023. This form details your earnings for the year and is sent to you and the IRS for tax purposes by January 31st.
Earning money on Venmo with a business profile is a great way to operate as a freelancer or independent merchant, but you should be aware of how taxes work when it comes to Venmo, so keep reading to learn more!
Does Venmo Report to the IRS?
If any business profile makes $600 or more in the year selling goods and services, Venmo is required by federal law to report these earnings to the IRS.
However, keep in mind that the standard use of Venmo, such as paying friends and family for dinner or receiving reimbursement for something you bought for a friend, is not subject to tax.
Any payment sent to a business profile on Venmo is considered a “goods and services” payment and will be counted towards your yearly income.
Furthermore, that is required to be reported to the IRS if it equals or exceeds $600.
Keep in mind that only payments received for goods and services are subject to tax according to the IRS.
Additionally, some transactions on your 1099 form may be exempt from tax as well, so be sure to talk to a licensed tax expert to learn what your yearly tax report should look like.
How Do I Access My 1099 Form On Venmo?
Shortly after the start of the new year, Venmo issues tax forms electronically. Your 1099 form will be available to download when you sign on to your Venmo account online.
Are Personal Accounts Subject to Tax On Venmo?
Personal accounts that are used for transferring money between friends and family are not subject to tax. The required tax reporting does not apply to personal use of the Venmo app.
However, personal accounts are not to be used to sell goods and services, which is why Venmo now has an option for users to create a business profile.
When Does Venmo Send 1099 Forms?
Venmo issues all tax forms at the start of every year, therefore, they should be available to download from your online Venmo account by January 31st.
Additionally, when Venmo issues a 1099-K form to your account, it also reports the same information to the IRS for tax purposes.
However, business accounts that made under $600 in the year do not get automatically reported, nor do they receive a 1099 form.
How Do I Confirm My Tax Information On Venmo?
To complete your tax verification on Venmo so you can receive all the needed documents for the coming tax year, first go to Settings in the Venmo app.
Under settings, tap “Identity Verification.” There, you will have the option to enter in your tax ID or your SSN.
However, be careful when receiving emails to never enter sensitive information anywhere outside of the Venmo app.
Should I Still Report My Venmo Income If I Made Less Than $600?
If you made any amount of money selling goods and services on Venmo, even if you didn’t receive a 1099-K form, you should still report your earnings to the IRS.
This is because the IRS views income made on peer-to-peer platforms like Venmo as being the same as income made on any other platform, so the same rules for taxes still apply.
If you are unsure whether your income on Venmo needs to be reported with your other income for the tax year, be sure to speak with a licensed tax expert.
For business profiles on Venmo that earned $600 or more within the year, Venmo will send a 1099-K form online and will report your earnings to the IRS.
However, business accounts that did not make $600 in the year won’t receive a 1099 form, and their earnings won’t be automatically reported, but the Venmo user is still responsible for reporting any income to the IRS.