
Attention Texas Venmo And Cashapp Users – You Need To Know This New Law
Starting in 2025, a new law that affects Texas users of Venmo, CashApp, PayPal Zelle and other cash exchange apps kicks in. The taxman's looking for you ...
This isn't limited to Texas either, users of these services all over the United States of America will soon have to pay Uncle Sam whenever they receive money for work.
The new law will apply to 2024 earnings and, in 2026, the threshhold above which you must pay the taxman drops ... a LOT.
The resolution to start taxing earnings paid via these platforms actually passed several years ago but the IRS decided to sit on it a while because they were worried tax payers would be confused. Nice of 'em I guess but it's still a little confusing.
In a recent press release, the IRS confirmed that third-party payment platforms (PayPal, CashApp, Venmo, Zelle, and others) will soon report transactions that total above a certain amount to the government. For the calendar year 2024 or 2025, that limit is $5,000. For 2026 and beyond, that limit drops to $600. - zdnet.com
That is understandable, what I'm not clear on is how they tell what was payment and what was a purchase, gift or loan? I'm sure they have a way but don't think you can just lie about it.
The platforms, (Venmo, PayPal, etc), will track activity and if you start looking like a business, they'll ask you. If they suspect you have lied, they will investigate and, since they don't want to get in trouble with the IRS either, they will totally rat you out.
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