Anyone who used PayPal, Venmo or 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.
According to Marca, the agency is expanding its focus on digital transactions as payment apps are increasingly used for selling goods, offering services and operating side businesses.
When payment apps trigger tax forms
Payment 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 involve more than 200 transactions in a calendar year.
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However, the IRS has said some users may still receive a 1099-K below those levels, depending on how transactions are categorized or routed.
Business owners who accept credit, debit or gift card payments through these apps may receive a 1099-K regardless of transaction volume. Users who sell across multiple apps or marketplaces may also receive more than one form, each reflecting activity on a separate platform.
Income counts even without paperwork
{{/usCountry}}Business owners who accept credit, debit or gift card payments through these apps may receive a 1099-K regardless of transaction volume. Users who sell across multiple apps or marketplaces may also receive more than one form, each reflecting activity on a separate platform.
Income counts even without paperwork
{{/usCountry}}The IRS has stressed that the absence of a tax form does not eliminate reporting requirements.
“Whether or not you receive a Form 1099-K, you must still report any income on your tax return,” the IRS said. That includes payments for goods sold or services provided, including personal items sold at a profit.
The guidance applies to income earned through online marketplaces, auction sites, craft platforms, ticket resale services, car-sharing apps, crowdfunding platforms and freelance work.
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Personal payments are treated differently
The IRS draws a distinction between business income and personal payments. Money received as a gift, reimbursement or shared expense is not taxable income.
Examples include splitting meals, sharing travel costs, receiving birthday or holiday gifts or being reimbursed by a roommate for rent or utilities, Marca reported.
IRS is advising taxpayers to review their 2025 payment activity carefully. Income earned through PayPal, Venmo or Cash App may still need to be reported, even without official tax documents.