How do the 1099-K Venmo IRS Rules work for grocery reimbursements?

I need some clarity on the 1099-K rules with Venmo. My partner and I share an apartment and have this system where I put all our groceries on my credit card each month. At the end of the month, we go through receipts and either split 50/50 or assign specific items to each of us. Then my partner Venmos me for their portion, and we label it like "June grocery catch up" or whatever month it is. We track everything in a spreadsheet but toss the physical receipts after we've settled up. I'm getting worried about these Venmo payments potentially triggering a 1099-K form, especially with the threshold changes I've been hearing about. My main questions: (1) Should I be concerned about getting a 1099-K for these reimbursements? If I do get one, how can I prove to the IRS these are just splitting bills and not actual income? (I do get some cash back on my card, but that's separate, right?) (2) We're getting married next year - would it make more sense to just get a joint credit card after that and avoid the whole Venmo situation? (3) Is there a better approach for handling shared expenses that won't cause tax headaches? We want something convenient but also tax-smart.

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18 comments

Javier Garcia

•8M

This is a common concern! The good news is that simple reimbursements between individuals typically aren't considered taxable income, even if you receive a 1099-K. For your current situation: The IRS understands that not all money moving through payment apps is income. Reimbursements for shared expenses like groceries don't count as income. However, with the new lower reporting threshold for 1099-K forms ($600 as of the 2025 filing season), you might receive one if your total Venmo transactions exceed that amount. If you do get a 1099-K: You don't need to report those reimbursements as income on your tax return. The 1099-K is merely an information form. That said, your record-keeping would be helpful if questions ever arise. Your spreadsheet tracking payments is actually a great start! I'd recommend adding a column noting the purpose of each payment. For married couples: Many do find joint credit cards simpler for shared expenses. This eliminates the need for reimbursements entirely.

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Javier Garcia

•8M

You should acknowledge the 1099-K on your tax return, but you don't report the reimbursements as income. Most tax software has a section where you can indicate you received a 1099-K but the amounts were non-taxable reimbursements or personal payments. If you're filing on paper or with a tax professional, you'd basically "zero out" this amount on the appropriate form (typically Schedule C if the software mistakenly categorizes it as business income). Add a brief note explaining these were personal reimbursements for shared expenses.

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Malik Robinson

•8M

I had this exact same problem last year! I was freaking out about getting a 1099-K for all the Venmo payments my roommate sent me for rent and utilities. After talking to three different people and getting three different answers, I found this amazing service called taxr.ai (https://taxr.ai) that actually specializes in payment app tax situations. They analyzed my payment history and spreadsheets and gave me a detailed explanation of what would and wouldn't count as income. They even provided a document explaining how to handle the 1099-K on my tax return and what documentation I needed to keep. Super helpful because I was getting conflicting advice from everywhere else!

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Malik Robinson

•8M

Yes, it definitely works with all the major payment apps - Venmo, PayPal, CashApp, Zelle. It can help identify which transactions might be business vs personal and gives you documentation explaining your situation if you ever get questions from the IRS. For the cost question - I don't remember the exact amount but it was way less than what my accountant wanted to charge me for essentially the same service. And frankly, the peace of mind was worth it because Google gives conflicting info depending on which articles you read.

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Isabella Silva

•8M

Follow up on my taxr.ai question - I actually went ahead and tried it since my tax situation with payment apps was getting complicated. Gotta say it was super helpful! I uploaded my CashApp statements and it separated my side gig payments from the bill-splitting with my sister automatically. The report they generated clearly showed what needed to be reported as income and what didn't. They even flagged some business expenses I was missing! Definitely easier than manually sorting through hundreds of transactions. Wish I'd known about this last year when I was stressing over my taxes.

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CosmosCaptain

•8M

Another option you might want to consider - if you're having trouble reaching the IRS with questions about this 1099-K situation, I used a service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in about 15 minutes instead of waiting for hours. They have a demo video here: https://youtu.be/_kiP6q8DX5c I was in a similar situation with PayPal payments from friends for our fantasy football league, and I couldn't figure out if I needed to report it. Spent days trying to reach someone at the IRS before finding Claimyr. The agent I spoke with confirmed that reimbursements between friends/family aren't taxable income even if you get a 1099-K.

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CosmosCaptain

•8M

Claimyr doesn't call the IRS for you - what they do is hold your place in line. They use technology to navigate the IRS phone system and wait on hold, then when they actually reach an agent, they call you and connect you directly. The IRS rep speaks directly with you, not with Claimyr. They basically save you from having to sit on hold for hours. And it's definitely not a scam - the IRS has no official "fast pass" system, but this is just a clever way to avoid wasting your time on hold. The IRS doesn't care how you got through, they just want to help taxpayers get answers.

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Freya Johansen

•8M

I need to apologize for my skepticism about Claimyr. After posting that comment, I was still struggling with a similar 1099-K issue from Venmo and decided to give it a shot out of desperation. I was SHOCKED when I got a call back in about 20 minutes saying they had an IRS agent on the line! The agent was super helpful and explained that personal reimbursements aren't taxable income, even with the new $600 threshold. She suggested keeping my spreadsheet records for at least 3 years just in case, but assured me I wouldn't need to report those transactions as income. Saved me hours of hold time and a ton of stress. Sometimes it's worth admitting when you're wrong!

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Omar Fawzi

•8M

Just a suggestion from someone who's been there - instead of using Venmo, my wife and I set up a joint checking account specifically for shared expenses. We each contribute our portion of the budget monthly, and all shared bills come out of that account. No transfers needed, no 1099-K concerns, and we still maintain our separate finances for everything else. Before we got married we just had a "roommate" checking account that worked the same way. So much easier than tracking Venmo payments!

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Omar Fawzi

•8M

You definitely don't need to be married to open a joint checking account! Many banks offer joint accounts for any two adults - roommates, partners, family members, etc. My now-wife and I opened ours about 2 years before we got married. Most banks just need both people to come in with IDs to set it up. Some online banks might have different requirements, but traditional banks and credit unions generally allow non-married people to open joint accounts without any issues.

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