How to Handle a Surprise 1099-K from Venmo, PayPal, or Cash App

Starting in 2024, many taxpayers will receive a Form 1099-K for payments made through third-party platforms like Venmo, PayPal, and Cash App. Here’s what you need to know:

1. Why You Got It

• The IRS now requires these platforms to send a 1099-K if you receive over $600 in gross payments (regardless of the number of transactions).

2. Does It Mean I Owe Taxes?

• Not always. If it was a personal transaction (e.g., your roommate paying you back for rent), you likely don’t owe tax—but you may still get a 1099-K.

3. What to Do If It’s Personal

• Keep records (screenshots, notes) showing the nature of the payment.

• Inform your tax preparer — we’ll help document and remove it from taxable income.

4. If It’s Business Income

• You must report it, even if you didn’t receive a 1099-K in the past.

• Track related expenses to reduce your tax liability.

5. Avoiding Issues

• Consider separating business and personal transactions by using different accounts.

• Label transactions clearly in the app when possible.

📌 Got a surprise 1099-K? Don’t panic — contact us and we’ll walk you through it.