Venmo paypal logo professional#

Distinguish your transactions Once you've downloaded your transactions, determine which ones were business transactions and which were personal.Print a transaction report A lot of peer-to-peer payment platforms allow the user to print transaction reports.

Venmo paypal logo professional#

And even if you have the help of a professional accountant, you'll want to take these three steps on your own, Wilson says. If you are earning money on one of these apps though, you may want to consult a tax professional. If you go out to dinner with a friend and send them your half of the bill via a cash transfer app, that transaction is not taxable, either, she says. As long as you can prove with a receipt that you originally paid more than $1,200 for that couch, that is not considered taxable income, Wilson says. This new reporting requirement only applies if someone is buying or selling goods and services using a peer-to-peer payment platform, says certified public accountant Sheneya Wilson, the founder and CEO of Fola Financial. If you have a side hustle walking dogs, for example, and you're getting paid through Venmo, that is taxable income and will need to be reported to the IRS.īut let's say you sell a couch to someone online for $1,200. The reporting requirement is an effort to reduce the country's annual tax gap - the difference between taxes owed and taxes paid - which the IRS estimates to be roughly $166 billion per year, not including the tax gap of large corporations. It's not a new tax and it does not suggest levying a new tax. They don't themselves determine tax liability.' The idea that any payment received over $600 will be automatically taxed as income is false, he explains.

'There's a little bit of confusion over this Venmo rule,' says Steven Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center at the Urban Institute. It applies to your 2022 taxes, which you'll file in the spring of 2023. The new reporting requirement only applies to sellers of goods and services, not personal payments, like if someone paid you back for dinner.Īnd it doesn't apply to the taxes you're filing this year. Those posts refer to a provision in the American Rescue Plan Act, which went into effect on January 1, 2022, according to which anyone receiving $600 per year using Venmo, PayPal, Zelle, or Cash App will receive a 1099-K and be required to report that income on their taxes.