Question

Paypal, Venmo, etc

Forum|Forum|3 years ago
August 31, 2022
1 reply
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Am I going to be taxed on the money my friends send me to PayPal? We purchase things together (like meals, etc) and then they send me their portion. Is that going to affect me and why would it affect me when I'm not earning the money?

KochuK

Hi tamsolo, thanks for posting the question.

I believe below link answers all your questions.

Quote

What if a payment app mistakenly sends me a 1099-K after a meal with friends?

The law is clear that money received as a gift or reimbursement of a share of a meal should not be reported on a 1099-K. But mistakes may happen.

Next year, if you erroneously receive a 1099-K, you will have to contact the payment app company to request they send a correction to the IRS. This could be time consuming and affect how fast your return will finish being processed.

Unquote

TAS Tax Tip: Use caution when paying or receiving payments from friends or family members using cash payment apps

https://www.taxpayeradvocate.irs.gov/news/tas-tax-tip-use-caution-when-paying-or-receiving-payments-from-friends-or-family-members-using-cash-payment-apps/

Hope this helps.

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