The label your friends or family use when making the payments tells Venmo that the payment is for Goods or Services. It does not determine whether or not it is a taxable transaction for IRS purposes. If you are actually providing goods or services to the friends and/or family is what determines if it is taxable. If Venmo sees a payment marked for Goods and Services, they may report it to IRS as income that you received. You will be able to include it on your tax return and also show it as a negative amount on your tax return as well if you have a payment that was incorrectly labeled.
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