3 Things To Know About How Venmo Taxes Work

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There’s no doubt that payment apps like Venmo are a convenient way to send and receive payments, but many don’t know that certain Venmo transactions need to reported for taxes.

If you’re a business owner or freelancer, you may be receiving an extra tax form that outlines your Venmo transactions. Even if not, you’ll still need to keep a close eye on your Venmo account to ensure Uncle Sam doesn’t think you’re doing anything suspicious. 

Here are three things you need to know about how Venmo affects your taxes.

Also see three records you should keep indefinitely once your taxes are filed.

Not Everyone Gets a 1099-K

If all you’re doing is sending money back and forth to friends to pay off happy hours or dinners out, you most likely don’t have to worry. But the second you start accepting business income on Venmo, that money will need to be reported. 

The intent of Form 1099-K is to track sales from legitimate small businesses and solopreneurs (yes, you too, freelancers). You’ll typically receive this form once your income is at or higher than the threshold set by the IRS. For 2025, that’s $2,500.

You should be able to download Form 1099-K from Venmo by the end of January for the previous tax year. If you signed up for Venmo before July 22, 2022, you may get your 1099-K in the mail, according to Venmo’s website.

Reporting Thresholds May Change

It’s important to note that reporting thresholds can change.

For the 2024 tax year, the reporting threshold is $5,000 in business income from third-party apps like Venmo. Meaning if customers or clients paid you at least that amount through Venmo, you will receive a 1099-K. 

The threshold for the 2025 tax year will go down to $2,500 minimum, with the $600 threshold being implemented in the 2026 tax year. 

It’s Up to You To Maintain Accurate Records

Even if you don’t receive a Form 1099-K from Venmo or any other third-party payment apps, you are ultimately responsible for reporting your income accurately to the IRS. For example, if you received income through Venmo for selling goods and services below the income threshold, you will still need to report that on the relevant tax form when you submit your income tax return to the IRS.

And even if you do get one of these forms, it’s a smart idea to check to see whether it’s accurate. If not, it’s up to you to reach out and request that the mistake gets fixed. The earlier you do it, the more time you’ll have to get all your paperwork in order before your tax filing deadline. 

When keeping records, you can consider opening a separate business account at your bank or credit union and set up systems to record transactions regularly. There are plenty of bookkeeping software options available, or if you’re just getting started, a simple spreadsheet can work. 

Whatever method you choose, you want to be sure that you’re keeping detailed records. Aside for tax purposes, it can give you a clearer insight into your business finances, such as your earnings and profitability. 

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