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celeste567
Returning Member

VENMO

I have over 20k in transactions for my business on venmo, but i also used venmo for personal things.

Will i have to out venmo info into my taxes, if they give me a 1099K?

4 Replies
gkacpa
Employee Tax Expert

VENMO

Hello @celeste567, this is a great question and very common. 

 

If you are issued a 1099-K, it is very important that you report the full amount since there will be a matching issue if you don't. 1099's of all kinds are reported to the IRS, and when you file your tax return, if it is anything less than what was reported on the 1099, you may get a notice with an adjustment. 

 

The best way to report your business portion is to report the full amount on the 1099-K, then add a separate income line to back out the personal amount. For example, if you get issued a $20,000 1099 and $5,000 of that is personal, you would report the $20,000 as income, and then do another line of $5,000 and put a description stating it is personal. If that doesn't seem to work for you, you can back out the personal portion as a "rebates and refunds" in the income section of TurboTax and put a description that indicates it is personal reimbursements. 

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KochuK
Employee Tax Expert

VENMO

Hi celeste567,

 

I think you are referring to the American Rescue Plan Act of 2021 that modifies the reporting threshold for Form 1099-K Payment Card and Third Party Network Transactions. Starting 1/1/2022, a third party payment network will issue a form 1099-K for $600 or more in aggregate payments to IRS.

 

To report ALL business income (regardless 1099-NEC, 1099-Misc, 1099-K, cash, checks, various apps), you already reported business gross revenue from Venmo. With a 1099-K to IRS, you would still report the same amount.

 

For tax year 2022, it is recommended for you to separate the Venmo total receipts into business and personal portions to verify the the upcoming 1099-K, and to support your business gross income reporting.

 

I hope this helps. Thank you.

 

 

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celeste567
Returning Member

VENMO

ohh! So this won't start until 2022? Meaning, venmo will not send me a 1099K for the year of 2021?

celeste567
Returning Member

VENMO

Or, are you saying, starting 2022, they will send 1099Ks for 2021?

 

If so, how exactly would the IRS differentiate between personal venmo transactions and non-personal?

I have stopped using venmo for payment starting this week, since its so confusing.

 

I never had  venmo business acount, so everything looks "personal" not a paynment for "services and goods," but obviously I know the difference and put it in my books and business banking account...

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