Will Venmo send me a 1099 for fantasy football payments over $600 even though it's not business income?

15 Thanks for the explanation. So even if the winner gets a 1099-K, they just need to explain it's not business income on their tax return? Is there a specific form they should use to clarify this?

8 The recipient would report it on their Form 1040, but they wouldn't include it as business income on a Schedule C. Instead, they'd report it as "Other Income" on Schedule 1, Line 8z, and can include a brief explanation that it's personal fantasy football winnings from friends. They should keep good records of all the league transactions showing that this is just friends exchanging personal funds for a hobby activity, not a business enterprise. Having documentation of your league rules, participant list, and payment records would be helpful if there were ever any questions.

17 That sounds helpful! Does it actually give you the specific line numbers on tax forms where you need to report things? I'm terrible at figuring out where stuff goes on my return.

23 I'm a bit skeptical. How does it actually know the difference between personal payments and business income? Couldn't anyone just claim their business income was "just between friends"?

12 It does provide the exact form and line numbers based on your situation. For example, it told me exactly where to report the poker winnings on Schedule 1, which saved me tons of time figuring it out myself. As for distinguishing between personal and business payments, the system asks you clarifying questions about the nature of the transactions, frequency, profit motive, and other factors the IRS considers when determining if something is a hobby vs a business. It doesn't just take your word for it - it helps you properly categorize based on the actual tax rules, and explains the documentation you should keep to support your position if questioned.

11 How does this work exactly? I'm confused how a third-party service can somehow get through to the IRS when normal people can't?

3 Sounds like BS honestly. The IRS is deliberately understaffed to make it hard to get help. You're telling me this magical service somehow gets through when millions of people can't? I'll believe it when I see it.

19 It uses an automated system that continuously redials and navigates the IRS phone system for you. Instead of you personally sitting on hold for hours, their system handles that part and only calls you when an actual agent picks up. There's no magic to "getting through" - it's just handling the tedious waiting process for you. The IRS phone lines are actually accessible, it's just that most people give up after being on hold for an hour or get disconnected. This service just has more persistence than a human would.

1 Wait, so does this mean I have to report ALL my fantasy football winnings, even from smaller leagues where I don't get a 1099? What about losses from other leagues? Can I offset those?

7 Yes, technically all gambling winnings should be reported regardless of whether you receive a tax form. But fantasy sports among friends typically wouldn't hit that 300x threshold - if you pay $100 to join a league, you'd need to win $30,000 for that rule to apply! For your second question, you can deduct gambling losses but only if you itemize deductions on Schedule A, and only up to the amount of your winnings. This is why it's important to keep records of both your winnings and losses if you participate in multiple leagues or other forms of gambling. Most casual fantasy players don't bother with this level of documentation, but technically that's what the tax code requires.

9 Nope, all the major payment apps (Venmo, PayPal, Cash App, Zelle) now follow the same $600 reporting threshold for 1099-K forms. This changed starting with the 2022 tax year. Switching platforms won't avoid the reporting requirement.

Great advice about structuring the payments differently! I hadn't thought about the "friends and family" designation making a difference. One question though - if we use a shared pool outside of payment apps, how would that work practically? Like a separate bank account just for the league? That seems like it might be overkill for a casual fantasy football group, but I'm curious if anyone has tried this approach.

You don't necessarily need a separate bank account - there are simpler options. Some leagues use a designated "league treasurer" who collects cash at the draft or season start, then pays out winnings in cash at the end. This completely avoids the digital payment trail. Another approach I've seen is using a simple spreadsheet to track who owes what, then settling up periodically with smaller transactions (like paying weekly winners $50-100 instead of one big $600+ payout). You could also have multiple people collect portions of the pot to keep individual payment amounts under the reporting threshold. The key is just being thoughtful about how you structure things upfront rather than having one person handle all the money digitally. A little planning can save a lot of tax headaches later!

This is really helpful information about the delayed enforcement! I didn't realize the IRS was still using the higher $5,000 threshold for now. That explains why some people are getting 1099-K forms but not necessarily facing immediate tax consequences. The rotating treasurer idea is brilliant - it's like spreading the risk around the league so no one person looks like they're running a business. Plus it probably makes the league management more fair since different people take turns handling the administrative side. Do you know if there's an official timeline for when the IRS plans to fully implement the $600 threshold, or are they still figuring that out?

The IRS hasn't announced a definitive timeline for full implementation of the $600 threshold yet. They've been pretty vague about it, just saying they're working through "implementation challenges" and want to minimize confusion for taxpayers. My guess is they're waiting to see how the higher $5,000 threshold works out for a couple years before dropping it down. Honestly, this gives fantasy leagues and other casual groups some breathing room to figure out better payment structures. The rotating treasurer approach really does make sense - it also helps with league dynamics since nobody gets stuck being the "bank" every year. Plus if someone moves or drops out of the league, you're not scrambling to transfer all the money management to someone else. I'd recommend keeping an eye on IRS announcements each tax season to see if they provide updates on when the lower threshold might kick in fully.

This is really solid advice about payment categorization! I never thought about how the "goods and services" vs "personal" selection in Venmo could affect whether you get a 1099-K. That seems like such a simple thing that could make a big difference. The hybrid payment approach is interesting too - I could see doing something like collecting entry fees through Venmo (marked as personal) but then doing the big winner payouts in cash at our end-of-season party. That way we get the convenience of digital payments for the upfront collection but avoid the large digital transaction that might trigger reporting. Do you know if there's a difference in how various payment apps handle the "personal" vs "goods and services" designation when it comes to 1099-K reporting? Or do they all pretty much treat it the same way?