Physical Address

304 North Cardinal St.
Dorchester Center, MA 02124

Are Your Venmo Transactions Taxable?

As the deadline for tax season approaches, it’s essential to understand the tax implications of your financial transactions, including those made through third-party payment apps like Venmo.

In this article, we’ll explore the taxability of personal and business transactions on Venmo and other similar apps, as well as some general things to be aware of when using these platforms.

Personal Transactions on Venmo

If you’re using Venmo for personal transactions, such as splitting the bill with a friend or receiving a gift from a family member, you’ll be happy to know that these transactions are not reportable or taxable income.

The IRS is not interested in these types of exchanges between friends and family, so you can breathe a sigh of relief.

Business Transactions on Venmo

On the other hand, if you’re using Venmo for business transactions, such as running a side gig or a small business, these transactions are considered taxable income. This means that you need to report them on your income taxes every year.

For example, if you run a lawn care or pet care business on the side and receive payment through Venmo, or if you sell a product like original stationery or graphic t-shirts for a profit, these earnings must be reported on your income taxes.

Things to Be Aware of When Using Venmo

When using Venmo or other third-party payment apps, it’s essential to be aware of the following:

  • Personal versus business transactions: Make sure to keep track of your personal and business transactions to avoid confusion at tax time. If a personal transaction is accidentally tagged as a business transaction, it could cause issues when reporting your income taxes.
  • 1099-K tax form: If you run your business via Venmo, you’ll receive a tax form called a 1099-K, which includes all of your business transactions for the year. You’ll use this form to report your business income on your income taxes.
  • High threshold for 1099-K: In 2023, you’ll receive a 1099-K if you had $20,000 or more of transactions on one of these apps. This is a relatively high threshold, so most users won’t need to worry about it.


As with any financial transaction, it’s essential to understand the tax implications of using third-party payment apps like Venmo. While personal transactions are not taxable, business transactions are, so it’s crucial to keep track of your income and report it accurately on your income taxes.

By being aware of the differences between personal and business transactions and keeping accurate records, you can ensure that you’re in compliance with IRS regulations and avoid any potential issues down the line.

As the use of third-party payment apps continues to grow, what steps can the IRS take to ensure that users are accurately reporting their income and paying their fair share of taxes?


Whether it's exploring the impact of emerging technologies on business operations or providing tips for effective project management, this author's writing is always informative and engaging.

Leave a Reply

Your email address will not be published. Required fields are marked *