Do you use Venmo or another cash app for business transactions? You’ll likely be receiving less tax forms this year, thanks to a recent announcement by the IRS.
In this article:
- Cash apps like Venmo will no longer be required to issue 1099-Ks to taxpayers who have met the lower $600 threshold for 2023 tax filing season.
- The $600 reporting threshold will now go into effect for the 2024 tax filing season.
- This reporting delay is meant to allow for a smooth transition for taxpayers, tax professionals, and supporting tax software.
IRS delays $600 reporting threshold requirement for Venmo tax reporting and other cash app transactions
Venmo and other cash app users were gearing up to receive an extra tax form this 2023 tax filing season.
Due to the American Rescue Plan Act of 2021, cash apps like Venmo, PayPal, and Zelle were required to issue a Form 1099-K to all users who received more than $600 in transactions.
Originally, this $600 reporting requirement was meant to go into effect for the 2023 tax filing season.
However, the IRS recently announced a delay in this lower reporting threshold. With this delay, cash app companies are not required to issue 1099-Ks for this lower reporting threshold until the 2024 filing season.
Why the change to Venmo tax reporting and other cash app transactions?
According to Acting IRS Commissioner Doug O’Donnell, this change was made to allow for clarity in the transition among taxpayers, tax professionals, and supporting tax software.
“The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements,” explains O’Donnell.
Which cash app transactions are taxable?
However, just because you won’t receive Form 1099-K from cash apps like Venmo doesn’t mean your tax obligations have changed.
You’re still required to self-report — and pay taxes on — business income you’ve received via cash apps like Venmo, PayPal, or Zelle, no matter what income threshold you’ve reached. It’s always important to keep detailed, accurate records of these transactions in order to avoid IRS underreporting penalties.
On the other hand, personal transactions made on these cash apps, like reimbursements for meals out with friends, are not considered income and not required to be reported.
Some users will still receive a 1099-K Form for cash app transactions this year
Have you received more than $20,000 in business payments from more than 200 transactions via a cash app like Venmo?
If so, you’ll still receive Form 1099-K this year for the 2023 tax filing season. This is in line with previous reporting threshold requirements.
Have you already received Form 1099-K for your cash app transactions?
Stay tuned for IRS guidance on what to do if you’ve already received Form 1099-K in accordance with the American Rescue Plan changes.
Get help with your Venmo tax reporting & other cash app transactions
Our tax advisors stay up to date on changing IRS regulations — so you don’t have to. Work with a Landmark CPA to ensure a smooth tax filing process.