Employer paying through Venmo 'family and friends' - tax reporting implications?

This is a common issue in the gig economy. Since you're essentially being treated as an independent contractor (not an employee), you'll need to report this income on Schedule C along with your Form 1040, even without receiving a 1099. Keep detailed records of all payments received through Venmo, including dates and amounts. Screenshot your payment history as evidence. Unfortunately, Venmo won't issue a 1099 for "friends and family" payments - that's partly why some employers use this method (to avoid payroll taxes). You should also be aware that as self-employed, you'll need to pay both the employer and employee portions of Social Security and Medicare taxes (15.3% total) via Schedule SE. However, you can deduct business expenses like cleaning supplies, transportation between job sites, etc.

I was in a similar situation last year with my contracting gigs. After hours of research and stress, I found taxr.ai (https://taxr.ai) and it was incredibly helpful for self-employment situations exactly like yours. I uploaded screenshots of my Venmo transactions and it automatically categorized everything, then walked me through exactly what forms to file and how to report income without official 1099s. It even helped me identify deductions for my work expenses I hadn't considered. The best part was it explained everything in simple terms instead of confusing tax jargon.

I need to follow up about taxr.ai - I decided to try it despite my skepticism and I'm genuinely impressed. I was in the exact same situation with irregular payments through various apps including Venmo "friends & family" transfers. The system actually helped me properly categorize everything as business income and guided me through the Schedule C filing process. It even found some legitimate deductions for my home office and supplies that I was eligible for. Ended up saving me from potentially serious issues with unreported income. For anyone dealing with non-traditional payment methods, it's definitely worth checking out.

Another option you might want to consider - if you need to actually speak with the IRS about this situation (which might be smart given the complexity), I used Claimyr (https://claimyr.com) after being stuck on hold for HOURS trying to get through to the IRS directly. They have this system that basically waits on hold for you and calls you back when an actual IRS agent is on the line. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was suspicious at first but it saved me a literal half-day of waiting on hold. The IRS agent I spoke with gave me specific guidance on how to report cash/app payments without 1099s and what documentation to keep.

I need to publicly eat my words about Claimyr. After dismissing it as a scam, I was desperate enough to try it for my missing refund issue. Not only did it work exactly as described, but I got through to an IRS agent who actually helped resolve my issue. The system called me back after about 90 minutes (which I spent doing other things instead of being stuck on hold). The IRS agent I spoke with explained that my refund was delayed due to a verification issue and helped me submit the right documentation. For anyone dealing with "under the table" payment situations like the original poster, this would definitely help you get specific guidance directly from the IRS about proper reporting.

Important thing to remember - even if your employer is dodging taxes, YOU can still be held responsible for not reporting income. I'd recommend keeping a spreadsheet of all payments received with dates and descriptions of work performed. For tax purposes, you'll file as self-employed using Schedule C (Profit or Loss from Business) since you're essentially operating as an independent contractor. Without a 1099, the IRS relies on your honest reporting. Just because your employer is cutting corners doesn't mean you should risk penalties!

You're definitely being paid as a contractor not an employee, which is probably why they're using Venmo. Make sure you track all your expenses for cleaning supplies, travel between job sites, any equipment you buy, etc. Those are all deductible on Schedule C! Also dont forget estimated quarterly tax payments if you owe more than $1000 for the year in taxes.

Your boss is 100% trying to evade taxes and proper employment classification. If you're working regular hours at their direction, you're probably legally an employee, not a contractor. They're using Venmo F&F to avoid having a paper trail of business payments. This is super common but definitely problematic. If you want to play it safe just reporting on Schedule C is easiest, but you could potentially report them to your state's labor department for misclassification. They're not only skipping out on income tax reporting but also unemployment insurance and workers comp.

Just wanted to add a practical tip that's helped me in similar situations - consider having a direct conversation with your employer about switching to proper business payments. You could frame it as "I need proper documentation for my taxes" rather than accusing them of anything shady. Many small business owners genuinely don't realize the tax implications of using F&F payments. Some are willing to switch to proper 1099 reporting once they understand it protects both of you. If they refuse or get defensive, that tells you a lot about their intentions. In the meantime, definitely keep detailed records as others have mentioned. I use a simple spreadsheet with date, amount, and brief description of work performed. Also consider opening a separate checking account just for this income - it makes tracking much easier come tax time.

I've been through this exact situation and understand how stressful it can be! The good news is that you absolutely can handle this correctly without an accountant. Here's what I learned: You'll report this income on Schedule C (self-employment) since you're being treated as an independent contractor. The IRS doesn't care HOW you were paid - cash, Venmo, check, whatever - income is income and must be reported. Keep meticulous records: screenshot every Venmo payment, note the dates and amounts, and write down what work you did for each payment. This is your paper trail. Also save receipts for ALL work-related expenses - cleaning supplies, gas for driving between jobs, even a portion of your phone bill if you use it for work coordination. One thing that really helped me was setting aside 25-30% of each payment in a separate savings account for taxes. Since nothing is being withheld, you'll owe both regular income tax AND self-employment tax (15.3% for Social Security/Medicare). This prevents a nasty surprise at tax time. Don't let your employer's sketchy payment method put YOU at risk with the IRS. Report your income properly and you'll be fine!