For individuals, it’s also important to ensure you aren’t being taxed on money you receive through Venmo, such as your friend sending you money via Venmo to split a pizza. To make sure these transactions are processed as personal payments, without fees or tax ramifications, toggle the button that says “Turn on for purchases” to the “off” position, where it will appear as a gray circle.
If you accidentally send a friend money and the button was “on,” indicating a business purchase, your friend will have to pay fees. If it happens often enough to add up to $600 or more, your friend will also have to pay taxes on that money.
If you accidentally send funds with the “purchase” button on, the person who sent the money (not the recipient) should contact the Venmo support team immediately to have the fees refunded.