Cash App users may need to report business transactions for tax purposes
From Yahoo Finance: 2025-04-09 18:30:00
Taxpayers using Cash App may face surprises with Form 1099-K for business payments on the app, potentially impacting federal and state tax returns. Transactions through apps like Cash App, Paypal, or Venmo could qualify as taxable income, especially for business or self-employment-related payments. Changing income tax rules this season may require reporting Cash App payments.
Personal transactions like splitting costs with friends don’t need to be reported, but business-related transactions must be reported. Business account holders on Cash App meeting reporting thresholds for the year ($5,000 for 2024) will receive a 1099-K for tax purposes from Cash App and the IRS. Small business owners and freelancers must report payments for goods and services to determine tax liability.
The minimum threshold for reporting business payments on payment apps has been gradually phasing in, dropping to $5,000 for the 2024 tax year. Different states may have their own reporting thresholds, so it’s crucial to check state rules before filing taxes. Taxpayers should accurately report all taxable income from Cash App and other platforms on their tax returns to avoid penalties.
Cash App doesn’t provide 1099-K forms to personal account holders but may flag business-related transactions. Users continuing business dealings on personal accounts may face suspension for violating Cash App’s terms of service. The IRS payment app reporting rules apply to other platforms like Paypal and Venmo, with exceptions like Zelle, which is accessed through banks.
State-specific reporting thresholds for payment apps like Cash App vary, with thresholds ranging from $600 to $1,200 in different states for 2024 business payments. Reporting cryptocurrency transactions on Cash App is separate from business income reporting, with users responsible for accurate tax reporting. It’s advisable to seek professional tax advice for accurate reporting.
Read more at Yahoo Finance: Do you have to pay taxes on Cash App transactions? Here’s what the IRS says.