Venmo, PayPal & 1099‑K: What Taxpayers Need to Know
You may have heard buzz about “Venmo being taxed” or “1099‑K changes,” especially if you’ve sold something online or earned money through gig work. Let’s clear it up in straight, practical terms.
What Is a 1099‑K?
Form 1099‑K is an information tax form used to report payments you receive through payment apps (like Venmo, PayPal, Cash App) or online marketplaces when those payments are for goods or services — not personal transfers between friends and family.
It doesn’t create a new tax, but it alerts the IRS to income you’ve received so you report it correctly.
Current Reporting Threshold
For payments you receive during 2025 (filed in early 2026), a payment app generally must issue a 1099‑K only if:
• You received more than $20,000 in gross payments, AND
• You had more than 200 transactions during the year.
Some platforms or states may still issue a form at lower amounts. But the key takeaway is that the older, higher federal threshold applies again.
You Still Must Report the Income
Even if you don’t receive a 1099‑K, you are still required to report all income you received for goods or services on your tax return. Getting no form does not mean the income isn’t taxable.
This applies to:
• Side gigs
• Online sales
• Freelance work
• Services you are paid for through an app
Personal vs Business Payments
Payments that are purely personal — like splitting meals, or friends paying you back — are not taxable business income. If you ever receive a form that includes personal payments, work with the issuer or your tax professional to correct it.
Quick Tips
• Keep good records of your income and expenses
• Try to separate personal and business transactions in payment apps
• Don’t base your tax decisions only on whether you received a form
• Reach out for help if you are unsure
If you’re unsure how income from payment apps affects your tax return — or you received a 1099‑K and aren’t sure what to do with it — let us help you sort it out before filing season.
This article is intended for general informational purposes and does not constitute tax advice. Please contact us to schedule a complimentary consultation and learn how these updates may affect your specific situation.