Anyone who used PayPal, Venmo or the Cash app in 2025 may need to take a closer look at their tax return. The IRS has warned that some payments received through digital platforms may count as taxable income and must be reported even if no tax form is issued.
The IRS emphasizes that the absence of a tax form does not eliminate the reporting requirement. (pixels)According to Marka, the agency is expanding its focus on digital transactions as payment apps are increasingly used to sell products, provide services and conduct side businesses.
When the payment app triggers the tax formPayment platforms that process transactions for goods or services are required to issue Form 1099-K once users cross certain thresholds.
Traditionally, the form is generated when payments exceed $20,000 and there are more than 200 transactions in a calendar year.
Read more: IRS confirms $1,776 in payments to 1.5 million Americans tax-free: Who qualifies and why it matters
However, the IRS said some users may still receive a 1099-K below that level, depending on how the transactions are classified or routed.
Business owners who accept credit, debit or gift card payments through these apps can receive a 1099-K regardless of transaction amount. Users who sell across multiple apps or marketplaces can also receive multiple forms, each reflecting activity on a different platform.
Calculate income without even papersThe IRS emphasizes that the absence of a tax form does not eliminate the reporting requirement.
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Whether or not you receive a Form 1099-K, you still need to report any income on your tax return, the IRS said. This includes payment for goods or services provided, including personal items sold at a profit.
The guidelines apply to income earned through online marketplaces, auction sites, craft platforms, ticket resale services, car sharing apps, crowdfunding platforms and freelance work.
Also read: Missed your stimulus check? Here’s how Americans can still claim unpaid pandemic money
Personal payments are treated differentlyThe IRS distinguishes between business income and personal payments. Money received as gifts, reimbursements or shared expenses is not taxable income.
Examples include sharing meals, sharing travel expenses, receiving birthday or holiday gifts or having roommates pay for rent or utilities, Marca reported.
The IRS is advising taxpayers to carefully review their 2025 payment activity. Income earned through PayPal, Venmo or the Cash app still needs to be reported, even without official tax documents.
