Do I Need to Report PayPal/Venmo Income Over $600?
If you use apps like PayPal, Venmo, or Zelle to get paid for goods or services, here’s what you need to know for 2025:
Yes — if you receive more than $600 through these platforms for business-related payments, it must be reported to the IRS. You’ll receive a tax form called Form 1099-K, and the IRS gets a copy too.
What Counts as Reportable Income?
You need to report income if you received payment for:
- Freelance or contract work
- Selling products or services
- Side gigs (like photography, tutoring, or design)
- Business transactions through apps like PayPal, Venmo, Cash App, or Zelle
Example:
You sell handmade jewelry online and get $900 through PayPal in 2025. That amount is reportable, and PayPal will issue you a Form 1099-K. You need to include it on your tax return—even if you didn’t receive a form yet.
❌ What’s NOT Reported
- Personal payments (like splitting dinner, rent with roommates, or gifts) are not considered business income.
- Payments marked as “friends and family” on PayPal or Venmo are generally excluded from 1099-K reporting.
⚠ However: Mislabeling business payments as personal could lead to tax trouble later. It’s always best to keep personal and business transactions separate.
What Is Form 1099-K?
Form 1099-K is a tax form sent by third-party payment processors (like PayPal) when you receive over $600 in business-related transactions during the year. You’ll get this form in early 2026 for your 2025 income.
Even if you don’t receive a 1099-K, you’re still responsible for reporting all business income. The IRS expects to see it on your return.
Tip for Tracking Your Income
Use a separate business bank account and keep detailed records of all income—whether it comes through PayPal, Venmo, checks, or other means.
Working with a Tax Accountant Los Angeles or CPA Los Angeles can help you stay organized and avoid underreporting income.
Don’t Let App Income Catch You Off Guard
Even small business transactions through payment apps can trigger IRS reporting. Whether you’re a creative, a freelancer, or a side hustler, Velin & Associates, Inc. is here to help. For more information about our services, please visit our website.
Velin & Associates, Inc
8159 Santa Monica Blvd STE 198/200 West Hollywood, CA 90046
323-902-1000
dmitriy@losangelescpa.org
Let us handle the tax forms—so you can focus on growing your income.
Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.