Rusty Shackelford
Fly on the Wall
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Hey all....this is not to be a holier than thou "I am above Venmo" thread.
The IRS rules for 1099s are now in effect. Anything tagged goods and services in aggregate over $600 is now sent to the IRS as of Jan 1 2023.
Friends and family transfers are not subject to the reporting....however, many friends and family don't know to make this tag change. I am not sure if goods and services are the default setting or not, but you need to make sure you and the folks you use venmo with make the correct tag as "friends and family". Last year the reporting limit was $20,000 so it was unlikely that a normal venmo user was ever gonna exceed that so a mis-tagged transfer would not have been an issue....but now at $600 several mis tagged items to pay back someone for dinner or and uber share can put you over and venmo reports that to Uncle Joe and withhold 24%.
I just went through this situation this weekend when a friend transferred an amount over $600 to my wife account....it was tagged as payment for goods and venmo put hold on funds until we released tax ID stuff so they could do witholdings....afterv multiple emails we were able to get funds released and returned to sender to correct the tag....it all worked out but was a real PITA.
Just a word to the wise..
The IRS rules for 1099s are now in effect. Anything tagged goods and services in aggregate over $600 is now sent to the IRS as of Jan 1 2023.
Friends and family transfers are not subject to the reporting....however, many friends and family don't know to make this tag change. I am not sure if goods and services are the default setting or not, but you need to make sure you and the folks you use venmo with make the correct tag as "friends and family". Last year the reporting limit was $20,000 so it was unlikely that a normal venmo user was ever gonna exceed that so a mis-tagged transfer would not have been an issue....but now at $600 several mis tagged items to pay back someone for dinner or and uber share can put you over and venmo reports that to Uncle Joe and withhold 24%.
I just went through this situation this weekend when a friend transferred an amount over $600 to my wife account....it was tagged as payment for goods and venmo put hold on funds until we released tax ID stuff so they could do witholdings....afterv multiple emails we were able to get funds released and returned to sender to correct the tag....it all worked out but was a real PITA.
Just a word to the wise..
