By Vishwam If any money is received through apps like Venmo, PayPal, Cash App, or Zelle, 2025 will be a big year with some major modifications in the tax arena. And with the risin’ 1099-K threshold for 2025 taking center stage, understanding the updated rules is a must so you don’t get blindsided during tax season.
This post will explain what the new rules mean, who’s affected, how to file for a 1099-K, and whether you have to pay tax on your Venmo income in plain, succinct language. And if you really don’t know where to begin, KB Tax Devisers will help you stay compliant and out of IRS trouble!
What Is Form 1099-K?
Form 1099-K would be generated for payment card transactions and third-party network transactions. If you sell products or perform services for one of those sites with PayPal, Venmo, or Stripe used as a payment method, you may potentially receive a 1099-K from them.
This isn’t a new form, but beginning 2025, the IRS will change who gets one and why.
The New IRS 1099-K Threshold for 2025
Here’s the big change:
In 2025, the IRS will require payment platforms to issue a 1099-K form if you receive over $600 in payments for goods or services — regardless of how many transactions you have.
That’s a huge shift from the old threshold, which was:
- $20,000 in gross payments and
- 200 transactions
If you made beyond $601 selling crafts on Etsy, freelance gigs, or payment via Venmo or PayPal, then, well, you may now receive a 1099-K from those platforms.
These are the brand-new IRS tax rules for 2025 introduced to enforce compliance with the gig economy and side hustle income.
Do I Have to Pay Taxes on Venmo?
One of the most common questions we hear is:
“Do I have to pay taxes on Venmo?”
The answer is: it depends.
If you use Venmo for personal transactions — like splitting dinner with friends or sending money to family — you do not owe taxes on those payments. Those are not considered income, and platforms shouldn’t report them.
However, if you:
- Receive payments for freelance work
- Sell products online
- Offer services and get paid via Venmo
Then yes, that income is considered taxable by the IRS.
In 2025, a single $650 payment on Venmo for a photography job could potentially be enough to trigger the issuance of a 1099-K, which the IRS would then expect to see reported in your return.
How to File 1099-K Form Correctly
If you receive a 1099-K in 2025, here’s what you need to do:
- Check the amount reported.
- Compare it with your own income records to ensure accuracy.
- Report it on your tax return.
- Typically, it goes on Schedule C if you’re self-employed.
- Separate business from personal.
- Only business transactions are taxable. If personal payments were mistakenly included, contact the payment app for a correction.
- Track your expenses.
- To lower your tax bill, deduct allowable business expenses (software, supplies, mileage, etc.).
- Work with a tax advisor.
- Services like KB Tax Devisers can help you navigate these forms and ensure you don’t overpay or underreport.
Pro tip: You may also be issued a 1099-NEC or a 1099-MISC for the same income reported on your 1099-K. In any event, report the income once to avoid duplications.
Who Is Affected by the IRS Crackdown on Digital Payments?
These new rules mainly impact:
- Freelancers and gig workers
- Small business owners
- Side hustlers
- Online sellers on platforms like eBay, Etsy, and Facebook Marketplace
- Independent contractors
- Anyone getting paid for services via apps like Venmo or PayPal
Even if you only made a few hundred dollars selling baked goods or doing side jobs — the IRS wants to know about it in 2025.
Common Myths Debunked
“I’m under $600, so I don’t need to report it.”
Even if you don’t receive a 1099-K, you’re still required to report all taxable income.
“If I didn’t get a form, I’m off the hook.”
Wrong. The IRS can audit based on bank transfers, app activity, or patterns, even without a 1099.
“It’s just a hobby, not a business.”
If you earn money from it, the IRS may still consider it taxable income.
How KB Tax Devisers Can Help
The IRS rules are only getting more complex — but you don’t have to figure it out alone.
At KB Tax Devisers, we specialize in:
- 1099-K filing assistance
- Freelancer and gig worker tax prep
- Small business tax strategy
- IRS audit protection
- Expense tracking & bookkeeping
Our tax advisors are up to date with the new IRS tax rules for 2025 and can help you stay compliant, lower your tax bill, and eliminate stress from digital payment reporting.
Ready to file with confidence? Schedule your free consultation with KB Tax Devisers today.
Key Takeaways
- In 2025, the 1099-K threshold is cast at a mere $600+… doesn’t matter if it was for one or two small payments.
- For goods/services received payments through the Venmo, PayPal, Zelle, or similar app, the platform might issue a 1099-K.
- Personal payments are non-taxable, unlike payments for business uses.
- Know how to properly file your 1099-K form, and track deductions.
- The KB Tax Devisers will explain the rules to you and keep your taxes clean and clear.
FAQs
Q1: Do I have to pay taxes on Venmo income if I only made $700?
Yes, if it’s business income. You will likely receive a 1099-K and must report it.
Q2: How do I file 1099-K form income on my tax return?
As a self-employed person, in most cases, this will be reported on Schedule C; otherwise, by the hobby income, on Schedule 1.
Q3: What if I accidentally received a 1099-K for personal payments?
Contact the payment platform to request a corrected form. You should not be taxed on personal transactions.
Suman 
Admin