Are you a Venmo user?
Are you wondering if your payment app report to IRS or police?
Well, if yes, you are on the right web page. Here, we will be mentioning some details on the query.
So, without any further ado, let us dive right into the details.
About Venmo –
Talking about Venmo, it is one of the most popular peer-to-peer payments apps in the USA. The app competes with other platforms like Cash App, Zelle, and others. Venmo is a great app but it can’t beat Cash App when it comes to the user interface and easiness to understand the app.
Venmo can be used easily to make payments. But, the app sports some unnecessary features like the public feed where users can share their transaction activity. Venmo doesn’t let the users share the amount involved in the activity, though.
The only thing that Venmo has is the trust factor; the app is owned by Paypal, the renowned name in the world of finance tech transaction platforms.
Well, a lot of Venmo users ask a very common query. Here, we will be answering the question. So, without any further ado, let us see if Venmo report to IRS or not.
Does Venmo report to IRS
Yes, Venmo report to IRS. And not only Venmo, every payments app, whether it is Cash App, PayPal, Zelle, but all of them are also required to report to the Internal Revenue Service of the USA. This is done to keep a record of the users who are supposed to pay taxes on additional income.
But, Venmo doesn’t report to IRS for every transaction made by the users. There are specific rules and thresholds. And if a user crosses the defined payment threshold, Venmo or any other payment app reports that activity to the IRS.
Talking about the threshold limit, it is 200 transactions and $20,000. On crossing these limits, Venmo will report to the IRS, and you will be asked to pay taxes on the amount.
About taxation, there is another thing that business owners must keep in mind. The payment you receive on Venmo for your products is taxable even if the income doesn’t meet the threshold discussed earlier.
ALSO READ: How to get a Venmo Card Under 18 Kid
Does Venmo report to IRS for personal use?
Earlier in this post, we mentioned how Venmo reports to IRS on exceeding the threshold limit. A lot of users also ask if Venmo reports to IRS for personal use as well.
Yes, Venmo reports to IRS for personal use as well if the amount crosses the threshold limit, that is, 200 transactions and $20,000. It doesn’t matter if you are a business owner or using it for personal payments. Venmo will report any kind of transaction to the IRS if it reaches the limit.
But, for non-business owners who are not selling products or receiving regular payments on Venmo. The amount lesser than the mentioned limit is not taxable. If you are making payments for Dominoes, that wouldn’t be taxable.
Can Venmo transactions be traced?
The straightforward answer to the question is – No, Venmo transactions can’t be traced by anyone. But, this only applies if you have made your transaction private. By default, your transactions are private on Venmo, but if you choose to share the details with others, your transactions activity will be shared on the public feed.
If you have kept the settings to private, you do not have to worry about that. Not even Venmo can trace your transaction. As mentioned in the first part of this post, Venmo reports to IRS if a user reaches the limit of 200 transactions and $20,000.
Another case where Venmo or any third-party company can trace the transactions is when the account holder seems to involve in any kind of illegal activity. Sometimes, transaction details can help concerned authorities to know more about a user’s behaviour.
Now you know, Venmo reports to IRS.
You might have understood when Venmo reports to IRS. There are certain limits to the transactions. And Venmo will only report the transaction to IRS if that crosses the 200 transactions and $20,000 limit.
We also told you that transactions made via Venmo would be taxable even if the limit isn’t reached. But, that only happens if you are a business owner and receive regular payments on Venmo from your customers in exchange for products.
And in the last part of the post, we mentioned why Venmo transactions could not be traced by anyone. We also discussed the scenarios where the transactions can be traced.
Ankit Kumar is an Engineer by profession and a blogger by passion. Over the last several years, he has written tons of articles, solving queries on Quora. He also has years of experience in investing in Cryptocurrencies, Funds, and Stocks.