I am helping a local horse show association with some bookkeeping, etc. and they asked me to investigate the possibility of using VENMO for some entry payments.
Does anyone work with horse shows that use this? If yes, have there been any problems? The association is a non profit so are there additional charges for receiving VENMO payments?
Any experiences and input are welcome.
We use Venmo for horse shows as of this year, as well as Paypal and of course checks, and I run the show office. The first show we did invoicing (they gave us their @ username and we would send a bill) and it was a mess. Now we require those using Venmo to pay us at the time of checking out at the show and I check the phone screen to make sure it sent through before officially closing the entry and providing a paid receipt. Everyone has to send through as family and friends as there is the $600 IRS limit if you claim them as business payments. You would have to pay taxes on those. There is no fee to use Venmo otherwise. If you have any other questions feel free to send me a message 
Thank you so much for the information. I will have to have out CPA look at the IRS limit. Most of our fees per show per competitor do not go over $600 so I have to see if that is cumulative.
Keeping up with the payments is one of my concerns.
I’m not an accountant, but yes, from what I would be aware, it would be cumulative annually as income. Even as a nonprofit, though, don’t you have to report revenue? How do they usually take and record payments (checks, credit card, or PayPal)?
As a general rule of thumb, I’ve always heard that it’s better to use PayPal for transactions with people you don’t know, even if you use the Friends and Family option, and if you’re already using PayPal, I’d probably just stick with one e-payment option. But the way things are going, that might change.
This is what one of our local show managers does. If she knows you, she even doesn’t mind if you leave the show, and she’ll close you out and Venmo request you later—saves a lot of time!
Income over $600 is always reportable and subject to being taxed whether it is reported as business or personal income. Business vs personal only changes what forms you use.
The new $600 thing is that PayPal, Venmo, etc. will be federally required to send out 1099’s to any person who has received payments in the calendar year of $600 or more. Currently, they are required to send a 1099 to any entity getting $20,000+/year. A 1099 is also reported to the IRS by the sender, therefore if you receive a 1099 and don’t do the appropriate tax paperwork, the IRS will know that you have unclaimed income.
It is unclear if the new $600 / 1099 thing will apply to transactions sent as Family & Friends or not. Some tax professionals say yes, some say it’s only for transactions labeled as business transactions.
Are there any other (online/digial) payment options out there show organizers are using and like? I am in a similar situation as OP – my favorite non-profit hosts shows two times a year. They are looking to get away from PayPal because the fees are exorbitant. I casually looked at their books and was astounded by how much PayPal is raking from them in processing fees.
I have seen several schooling shows near me add the PayPal or credit card fee for the rider to pay.
If you are an IRS-recognized tax-exempt not-for-profit, there is no incentive to under-report your income (since it isn’t taxed anyway). The 1099 just makes it easier to prepare the tax return.
My local (tax exempt) CTA uses Pay Pal. And yes, the person paying by Pay Pal has to pay the Pay Pal fee.
If I was charged the PayPal fee, I’d probably just write a check, and I assumed that the OP wanted to incentivize electronic payments for the organization’s ease.
The $600 threshold is an annual threshold to report payments made “generally” for services made to unincorporated individuals. So you would be on the receiving end of these 1099’s.
Depending on your organization’s status you may be incorporated, but tax exempt, which negates the reporting requirement for others.
Fortunately, the IRS has delayed implementing the $600 threshold for issuing 1099K’s for vendors like Venmo, PayPal, Zelle, etc. Regulation and lobbying are ongoing on that front…
If the organization wants to file all the paperwork there is a “non profit” PayPal fee rate that is lower.
This is not legal in all states. Some yes, but not all.
++This is not tax advice. Just one CPA’s understanding of some of the issues stated on this thread++
I believe there is language specifically forbidding it in PayPal’s TOS, too. I remember reading about it when I was trying to build a compensation package for my custom pet portraits (which I no longer do). PP would take a big percentage of my income once it was in the three digits.
Ah, yes. I was thinking it was not “ok” for PayPal fees…you jogged my memory now.
I was trying to keep it subjective in case I was wrong! lol
This is stuff I would normally forget myself, but I had one customer who really reamed me out about the practice. It’s all well and good at the end of the day, but the bigger the transaction the more $$ you lose. It’s not much when it’s one or two dollars for a $25 purchase, but when it’s $300 for a $3000 purchase… You sure miss it!
Needless to say I don’t offer my painting services anymore. 
My brain is fried with payroll, 1099’s, tax returns, estimated tax payments and the like this time of year. I try to avoid wading in on tax topics this time of year!
It is the time of year!!! I am a former town accountant. I get it. I picked a good time to go to a different “Discipline”. 
Those who pay venmo usually don’t have checks (usually). I’d say around 25% of the competitors use e payments if that?
I’m not the (or an) accountant, just the show office making sure entries are paid. Definitely an interesting discussion regarding taxes.
If you want to offer paypal you can always up your prices and offer a discount for paying with cash or a check. That would cover the paypal fees and I believe that is legal*.
*I am not a lawyer or an accountant or anything of that nature. There was a news report on this very topic recently and that is my understanding of what they said. I could very well be wrong so be sure to consult with your legal professionals.
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