Will I get taxed on Venmo if my friend sends me over $600 for something I bought them?

The $600 reporting threshold you're referring to is about 1099-K reporting requirements, not an automatic tax. Venmo (and other payment apps) are required to report to the IRS when someone receives more than $600 in payments for goods or services in a calendar year. The key here is that this applies to payments marked as "goods and services" - not personal transactions. If your friend sends the payment as a personal payment (like "paying back a friend"), it shouldn't trigger the reporting. Also important: even if it gets reported, you'd only owe taxes on actual income - not on money that's simply reimbursing you for a purchase. Just make sure your friend marks it as a personal payment, not a business transaction, and you should be fine. Keep the receipt of your purchase as proof that you didn't make a profit in case you need to explain the transaction later.

I had a similar situation last year where I was buying concert tickets for friends and they were Venmo-ing me back. I was super worried about the tax implications until I found https://taxr.ai which helped me understand exactly how these payment app reporting rules work. They analyzed my situation and confirmed that reimbursements aren't taxable income, even if reported on a 1099-K. The site explained that the burden of proof is on you to show it wasn't actually income if you get a 1099-K, so I've been keeping better records of these friend reimbursements. The peace of mind was worth it because I was freaking out about potentially owing taxes on money that was just passing through my account.

Just wanted to update - I was skeptical about taxr.ai but I decided to try it when I got a 1099-K from PayPal for a bunch of transactions that were mostly just friends paying me back for group purchases. The service identified which transactions were actual income versus reimbursements and created documentation showing I only needed to report about $220 of the $1,400 that appeared on my 1099-K. Saved me from overpaying taxes on money that was literally just passing through my account. The software automatically created these detailed transaction summaries that I could show the IRS if needed. Way better than my original plan of "explaining it if I got audited" lol.

If you're worried about getting through to the IRS to ask about these payment app reporting rules, use https://claimyr.com - I spent DAYS trying to reach someone at the IRS about my 1099-K questions and kept getting disconnected. Their hold line is ridiculous. The Claimyr service got me connected to an actual IRS agent in about 20 minutes instead of the 3+ hours I was experiencing before. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically they wait on hold for you and call when an agent is ready. The IRS agent I spoke with confirmed that reimbursements aren't taxable income even if reported on a 1099-K, but you need to keep records showing the money wasn't actually income.

I gotta admit I was SUPER skeptical about Claimyr but I was desperate after trying to reach the IRS for weeks about a 1099-K issue similar to what you're describing. I finally gave in and tried it, and no joke, I was talking to an actual IRS agent in about 35 minutes instead of the endless hold times I was getting before. The agent confirmed exactly what others here are saying - reimbursements from friends aren't taxable income, even if payment apps report it. She recommended keeping records of the original purchase receipts to match against the Venmo payments though, just in case.

Little tip from someone who's made this mistake before: have your friend send you the EXACT amount of the purchase. If they send you more than what you paid (even by a few dollars), that extra could technically be considered income. Also for your specific situation, you might want to think about whether your employee discount use for a friend is even allowed by your company policy. Some retailers have strict rules about employee discounts only being for personal use or immediate family. Just something to consider!

Friendly reminder that using your employee discount to purchase items for friends might be against your company policy. I know someone who got fired for this exact thing. They do check sometimes, especially for big ticket items like gaming consoles. Just something to consider before you risk your job!

Former tax preparer here. Everyone saying the $600 Venmo threshold is about 1099-K reporting is correct. But keep in mind: even if you don't get a 1099-K, you're still legally required to report ANY income from selling goods or services. The form is just a reporting requirement, not the thing that makes income taxable. That said, in your specific case, you're just getting reimbursed for a purchase - that's not income at all. You're not selling a service or making a profit. Just keep the receipt from the purchase so you can prove the money was just a reimbursement if questions ever come up.

Just to add another perspective - I've been in similar situations multiple times and here's what I've learned: Keep it simple and document everything. Take a photo of your receipt showing the $490 you paid, have your friend send exactly $490 (not a penny more) as a personal payment with a note like "reimbursement for console purchase," and you'll be fine. The IRS isn't going to come after you for a legitimate reimbursement, especially when you have clear documentation showing no profit was made. The whole point of the 1099-K reporting is to catch people who are actually running businesses through payment apps, not friends helping each other out. That said, definitely double-check your employee handbook about discount usage - that's actually the bigger risk here than any tax implications.

One thing I don't see mentioned much here is the timing aspect - if your friend sends you the $490 this year but you're worried about hitting that $600 threshold, remember that the 1099-K reporting is based on your total receipts for the calendar year across ALL transactions marked as goods/services. So if this is your only "business" transaction on Venmo for 2024, you'd be well under the $600 threshold anyway. But definitely make sure your friend marks it as "friends and family" or personal payment to avoid any issues. Also echoing what others said about the employee discount policy - that's honestly a bigger concern than the tax implications. Many retailers have zero tolerance policies on this, so just make sure you're not risking your job over helping a friend save some money!

Just want to emphasize what several people have mentioned - the employee discount policy issue is actually way more serious than the tax implications. I used to work in retail management and we absolutely did monitor large employee discount purchases, especially on high-value electronics. Gaming consoles are exactly the type of item that would get flagged for review. Most major retailers have systems that can track when employee discounts are used on big purchases, and some even require manager approval above certain dollar amounts. Getting caught could result in immediate termination and potentially being banned from future employment with that company. On the tax side, you're totally fine as long as your friend sends it as a personal payment for the exact reimbursement amount. But seriously consider whether saving your friend $200 is worth potentially losing your job and that 30% discount permanently.

Hey! I'm pretty new to this whole payment app tax situation too, but I wanted to share something I learned recently that might be helpful. I was in a similar spot where I was stressed about potential tax implications from friends paying me back for stuff. One thing that really helped me understand this better was realizing that the $600 threshold is specifically for payments marked as "goods and services" - not personal payments between friends. So as long as your friend sends the $490 as a personal payment (like "paying back a friend" or just leaving it unmarked), it shouldn't trigger any reporting requirements at all. The key is just making sure it's clearly a reimbursement and not a business transaction. Keep that receipt showing you paid $490, and you're golden from a tax perspective. That said, after reading all these comments about employee discount policies, I'm honestly more worried about that aspect for you! It sounds like that could be the bigger risk here. Maybe worth double-checking your employee handbook or asking a manager (hypothetically) about the rules before you commit to this?

I'm reading through all these responses and I think everyone has covered the tax side really well - you're definitely fine there as long as your friend sends it as a personal payment for the exact amount. But honestly, after seeing all these warnings about employee discount policies, I'm genuinely concerned for you. I work in HR and I've seen people get fired for exactly this scenario. Most major retailers have zero tolerance policies because they consider it a form of discount fraud, even if you're not personally profiting. The fact that it's a $700 gaming console makes it even riskier - those are exactly the types of high-value purchases that get flagged in their systems. My advice? Don't risk your job over this. That 30% employee discount is worth way more in the long run than the one-time favor for your friend. Maybe suggest your friend wait for a sale or look into other ways to save money on the console. Your financial stability and that discount for your own future purchases is way more valuable than helping one friend save $200. Trust me, no friendship is worth losing your income over, especially when you mentioned you're already tight on money.

I've been following this thread and I have to say, everyone's advice about the tax implications is spot on - you're definitely safe there as long as your friend sends it as a personal payment. But I'm genuinely worried about the employee discount policy warnings people are raising. I used to work at a big box electronics retailer and they were incredibly strict about employee discount usage. Gaming consoles were specifically on their "high-risk" list because they're expensive and popular items for resale. They had automated systems that would flag any employee discount purchases over $500, and management would review them within 24-48 hours. The worst part? Even if you explain it was just helping a friend, they often treat it the same as if you were running a side business using your discount. I saw three people get terminated during my time there for similar situations, and they all lost their discounts permanently across the entire company chain. Since you mentioned money is already tight, losing your job and that 30% discount would hurt way more than missing out on this one opportunity to help your friend. Maybe suggest he check out other discount options like student deals, military discounts if he qualifies, or wait for Black Friday sales? That $200 savings isn't worth risking your livelihood over.

I'm new to this community but wanted to chime in since I've been in a similar situation. Everyone's covered the tax side perfectly - as long as your friend sends it as a personal payment for the exact $490, you're completely fine tax-wise. That's just a reimbursement, not income. But honestly, after reading all these responses about employee discount policies, I'm really concerned about the job risk aspect. I had no idea retailers were so strict about this! It sounds like gaming consoles specifically get flagged because they're high-value items that are popular for resale. Since you mentioned money is already tight, losing your job and that 30% discount permanently would be devastating compared to missing out on helping your friend save $200 this one time. Maybe suggest he look into other options like waiting for sales, price matching, or seeing if your store has any legitimate friends/family discount events? Your financial stability has to come first, especially when you're already dealing with tight finances. No friend should expect you to risk your livelihood for their savings.

I'm new to this community but wanted to add my perspective since I've been dealing with similar payment app tax questions lately. Everyone here has given really solid advice about the tax side - you're definitely safe as long as your friend sends the $490 as a personal payment (not marked as goods/services) for the exact amount you paid. But after reading through all these responses about employee discount policies, I'm honestly more worried about that aspect for you! I had no idea retailers monitored employee discount usage so closely, especially for high-value electronics like gaming consoles. The stories people are sharing about immediate termination are pretty scary. Given that you mentioned money is already tight, risking your job and losing that 30% discount permanently seems like a huge gamble for a one-time $200 favor. That employee discount is probably worth way more to you over time than this single transaction would save your friend. Maybe suggest your friend look into other legitimate options? Some stores do price matching, or he could wait for Black Friday/holiday sales. There might be safer ways for him to get a deal that don't put your employment at risk. Your financial stability has to come first!