Does the IRS $600 reporting rule apply to all bank deposits or just third-party payment networks like Venmo?

The $600 reporting threshold applies specifically to third-party payment networks (like PayPal, Venmo, Cash App) - not regular bank deposits. When you deposit cash or a personal check that your roommate gave you as repayment for a loan, your bank doesn't report this to the IRS as income. What the IRS is targeting with the $600 rule is business transactions processed through payment apps. These companies (PayPal, etc.) now must issue 1099-K forms when business transactions exceed $600 in a year. This is for business income tracking, not personal payments between friends. Your cash deposit from your roommate repaying a loan is not reportable income regardless. Banks don't report regular deposits as income to the IRS - they only report suspicious transactions for anti-money laundering purposes (typically patterns of deposits just under $10,000).

After struggling with this exact issue last year, I found an amazing resource that cleared everything up for me! I was getting totally confused by all the contradicting tax advice about what counts as reportable income with the new $600 rule. I discovered https://taxr.ai which uses AI to analyze your specific tax situation and documents. I uploaded my bank statements and payment app history, and it immediately identified which transactions might be flagged under the $600 rule and which were clearly personal transfers not subject to reporting. The tool explained that regular bank deposits from friends/family repaying loans aren't reported to the IRS as income, but it also helped me identify which of my side-gig payments through Venmo needed to be reported. Saved me hours of stress and potentially avoided an audit!

Just wanted to share my experience with taxr.ai after seeing it mentioned here! I was super concerned about some side gig payments mixed with personal transfers in my Venmo, so I decided to give it a try. The analysis was honestly eye-opening - turns out several transfers I thought might be reportable weren't an issue at all, while a few I hadn't even considered were flagged as potential 1099-K transactions. The breakdown showed exactly which transactions fell under the $600 reporting rule and which were clearly personal. It also helped me understand how to better label my transactions going forward to avoid confusion. I'm much more confident now about which deposits might trigger reporting requirements. Definitely cleared up my confusion about this $600 threshold!

If you're still struggling to get clear answers about the $600 reporting rule, I highly recommend calling the IRS directly. After hours of reading conflicting info online about what deposits get reported, I decided to go straight to the source. Getting through to the IRS seemed impossible though - kept getting disconnected or waiting for hours! Then I found https://claimyr.com which got me a callback from the IRS within 35 minutes instead of waiting on hold forever. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed exactly what types of transactions fall under the reporting requirements. Turns out cash deposits at banks are definitely NOT reported as income under the $600 rule - that's specifically for business transactions through payment apps. Totally worth the call to get official clarification!

Ok I feel the need to post a follow-up here. After being totally suspicious about Claimyr, I decided to try it anyway because I was desperate to talk to someone at the IRS about my refund situation. I'm honestly shocked - it actually worked exactly as advertised. Got a call back from an actual IRS agent in about 45 minutes. While discussing my refund issue, I also asked about this $600 reporting rule, and the agent confirmed it ONLY applies to business transactions through third-party networks like PayPal and Venmo, not to regular bank deposits. For anyone struggling to get clear answers from the IRS, this service is legit. Can't believe I spent months trying to get through when this was an option.

To add to what others have said, even if you do get a 1099-K from a payment app, it doesn't automatically mean you owe taxes on that money. The 1099-K just reports the gross amount processed - it doesn't distinguish between taxable and non-taxable transactions. If you receive a 1099-K that includes personal transfers (like your roommate paying you back), you'll need to properly account for this on your tax return to avoid paying taxes on money that isn't income. Basically, you'd report the 1099-K amount, then offset the non-taxable portions elsewhere on your return. This is why good record-keeping is super important! Make notes about which transfers are personal vs. business.

I work at a bank (not a tax professional though) and wanted to clarify something important: banks DO report certain deposit activity to the IRS, but not in the way most people think. Banks file Currency Transaction Reports (CTRs) for cash transactions over $10,000, and Suspicious Activity Reports (SARs) for potentially questionable transactions. But these aren't income reports - they're anti-money laundering measures. Your $950 cash deposit from your roommate wouldn't trigger any reporting to the IRS unless there's a pattern that looks suspicious. The $600 threshold everyone's talking about is completely separate and only applies to third-party payment networks reporting business transactions.

Just to summarize what everyone's covered here since there's been a lot of great info shared: 1. The $600 reporting rule ONLY applies to third-party payment networks (PayPal, Venmo, Cash App) for business transactions - NOT regular bank deposits 2. Your $950 cash deposit from your roommate loan repayment will NOT be reported to the IRS as income by your bank 3. Banks only report cash transactions over $10,000 (CTRs) or suspicious patterns (SARs) - these are anti-money laundering measures, not income reporting 4. Even if you do get a 1099-K from a payment app, you can offset non-taxable personal transfers on your tax return with proper documentation The key takeaway for your situation: deposit that cash from your roommate without worry! It's a personal loan repayment, not income, and won't trigger any IRS reporting. Just keep a note about what the deposit was for in case you ever need to explain it later. Hope this helps clear up the confusion - this new rule has definitely caused a lot of misunderstandings!

This is such a helpful thread! I was literally having the same panic about this $600 rule. I've been avoiding depositing cash gifts from family because I was worried it would somehow get flagged as income I'd have to pay taxes on. Reading through everyone's explanations, it's clear that the $600 threshold is specifically for business transactions through payment apps, not personal deposits at banks. I feel so much better knowing that when my grandmother gave me $800 cash for my birthday last month, depositing it won't create any tax issues. Thanks especially to Madison for that clear summary at the end - really helps to see all the key points laid out simply. It's crazy how much misinformation is floating around about this rule!

This has been such an informative discussion! As someone who was also really confused about this $600 rule, I'm relieved to see so many knowledgeable people breaking it down clearly. I had a similar situation recently where a friend paid me back $700 for concert tickets I bought for both of us. I was worried about depositing the cash because of all the scary headlines about the IRS tracking $600 transactions. But after reading through all these explanations, it's clear that: - The rule only applies to business transactions through payment apps like PayPal/Venmo - Regular bank deposits from friends/family aren't reported as income to the IRS - Banks only report suspicious patterns or transactions over $10,000 What I found most helpful was learning that even if you do get a 1099-K from a payment app, you can properly account for personal transfers on your tax return to avoid paying taxes on money that isn't actually income. Thanks to everyone who shared their knowledge and experiences here - this thread should be bookmarked for anyone confused about this rule!

Welcome to the community! As someone who was also really confused about this $600 rule when it first came out, I wanted to add one more perspective that might help others reading this thread. I think part of the confusion comes from how the media reported on this rule. A lot of headlines made it sound like the IRS was going to start tracking ALL $600+ transactions, but that's not accurate at all. The rule specifically targets business income that was previously going unreported through payment apps. What really helped me understand it was thinking about the IRS's actual goal: they wanted to capture income from people running businesses through Venmo/PayPal who weren't reporting that income on their taxes. Before this rule, you could run a small business entirely through these apps and the IRS had no visibility into those transactions. Your roommate loan repayment, cash gifts from family, splitting dinner bills with friends - none of that was ever the target of this rule. The IRS isn't interested in taxing money that moves around between people for personal reasons, because that's not income in the first place. I hope this helps anyone else who's been stressing about normal personal financial transactions. The $600 threshold really is much more limited in scope than the scary headlines suggested!