Will the IRS receive reporting of the funds that I received through Venmo in 2023 and 2024?

Eagle Chamber's Business Tools & Resources Q & A

Question:
Will the IRS receive reporting of the funds that I received through Venmo in 2023 or 2024?


Answer:
2023 key consideration: Venmo and other payment processors will send a 1099-K to recipients who received $20,000 or more in 2023 and conducted at least 200 transactions. This will be implemented during the 2024 tax season when 2023 taxes are filed.

2024 key consideration: The IRS plans to require Venmo and other online payment processors to send a 1099-K to users who receive $5,000 or more. This will be implemented during the 2025 tax season when 2024 taxes are filed.

Overview:
In an effort to get a better grasp on payments that are going through the economy, in 2021 the IRS lowered the 1099-K reporting requirements from $20,000.00 or more in payments through the processor down to $600.00 but then back up to $5,000.00. However, the new rule has been confusing due to multiple changes as to when the new payment processor thresholds will commence and the amount changes in thresholds.
For business owners, it is wise to be aware of Venmo transaction amount thresholds in 2023 and 2024 and to compare transactions against their business’ recordkeeping so those payments and the payment processor’s numbers match up.

For suggestions on how to simplify Venmo receipts and expense transactions as well as all other bookkeeping tasks contact Melissa at TheBalanceandFlow.com.

Disclaimer: While I hope to provide as accurate results as possible, any information here should not be considered tax, financial, or legal advice. You should speak with your CPA or tax preparer about your unique situation for a more accurate valuation of your tax obligation and any potential savings. This is provided as educational information only to empower you with enough information to begin a conversation with your CPA.

Melissa Lally, MBA is the founder of Balance & Flow, Inc offering small business finance guidance, accounting & bookkeeping to wellness entrepreneurs and businesses nationwide