Cash App is used by millions of users; the reason behind the extreme usage is the services offered by the application. You can send or receive money instantly without any hassle. Also, there is either no or very minimal fee involved for utilizing other services. But here is the thing, recently the US Government has introduced new Tax Law 2022 for the apps like Cash App, Venmo, or PayPal. The rule states that the application will be reporting the revenue details (if the users are making money from goods or services) to the IRS.
Before this Cash App Tax Law 2022, the application companies have to report for the users who have made $20,000 in revenue in a year or have made a minimum of 200 transactions. But after the new law, which is imposed from January 01, 2022, the reporting will begin once the $600 revenue is reached.
Well, when it comes to Taxes, a lot of people get afraid of the technicalities, but in this, you have nothing to worry about. As once you reach the threshold, the application (Cash App) will send you a notification with Form 1099-Ks, which you will have to fill, after which the form will be submitted to the IRS. These details will be used while filing the taxes in 2023.
A lot of people are calling Cash App Customer Service number and asking about this new form that appears on their screen to provide tax information, and they also ask why it is happening. Well, the answer is the Government has asked these third-party payment applications to report the transactions if they reach $600 for goods or services sale as most people were using the online apps to receive money in order to save taxes. It is not because of the transactions you have to report; it is because of the new Tax Rule imposed, which you have to follow & so the companies.
See, whenever you reach the threshold of $600, the app will send you a notification with Form 1099-K. Once you open that form, the app will ask you some of your details associated with your identity or tax. For instance, you will provide the Social Security Number, Individual Tax Identification Number, Employer Identification Number, and some other details too. Remember, you don’t have to share any account/bank passwords or debit/credit card details.
The Form 1099-K will not consider any adjustments, refunds, or discounts, and the reporting will be done for the total gross income in Box 1a.
If there are any related business transactions involved, then they should be added to Form 1099-K.
Well, as long as you are involved with business transactions (which is taxable), you have to report it with the new form. A lot of people ask if they have to report for payments received from friends & family. To be honest, it is good news that you don’t have to report any non-taxable earnings.
You won’t have to report the transactions:
Apart from this, any items purchased for personal use at a loss is not taxable.
It is good that you’re a responsible person who takes taxes seriously. If you run a business, you must be getting a lot of payment slips, papers, etc. So to keep a good record, you may take the help of any recordkeeping system. Apart from this, you can export the history of your Cash App Account too. For instance, if you Activate Cash App Card and use it for withdrawals, you can get the history of all the transactions which you can use during report filing. Not only this, there are still several ways which could be helpful to you. For instance:
Though your transactions are always recorded in your bank accounts, there is nothing to worry about. But you should always explicitly inform about any other transactions involved.
No, the new form is just for the information purpose; you don’t have to pay any money to anyone, including the taxes for filing. But once the report is done, the tax will be automatically generated by the Government, which you have to pay during the 2023 filing. So, in other words, you don’t have to pay taxes in 2022 for this thing. Once the details are received by the Government, the taxes will be imposed in 2023.
In that case, you need to be sure if the transactions are from goods and services sales. If not, then you don’t have to worry. But if it is, then you should talk to Cash App Customer Support Team and request Form 1099-K. Usually, the form will appear automatically on your screen or may be sent to you, which you have to fill out. And if, in any case, you have not received it, you may connect with the customer support executive for the same.
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