If you used Cash App, Venmo, PayPal, or another payment app to receive money in 2024, your tax filing process may come with new twists in 2025. A key document—the IRS Form 1099-K—might land in your inbox, and knowing what to do with it could save you stress, penalties, or an audit.
Let’s break down exactly when and how you need to report Cash App income, who needs to pay taxes, and what the new IRS thresholds mean for everyday users, gig workers, and entrepreneurs.
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Do You Need to Report Cash App Payments on Your Taxes?
It Depends on the Nature of the Transaction
If you’re just using Cash App to pay back friends, split bills, or send money to family, you’re in the clear—those personal transactions aren’t taxable and don’t need to be reported.
However, if you received payments for goods or services, that’s a different story. The IRS considers those transactions taxable business income, even if they were made through a mobile payment app.
What Is IRS Form 1099-K and Why Did You Get It?
Form 1099-K is issued by payment platforms like Cash App when your account meets certain thresholds for business-related payments. For the 2024 tax year, that threshold was $5,000, but it’s dropping sharply next year.
If you received $5,000 or more in business transactions in 2024 using your Cash App business account, you’ll receive this form—and so will the IRS.
Understanding Business vs. Personal Transactions
Not sure which payments are taxable? Here’s how the IRS views common scenarios.
Examples of Taxable Business Transactions:
- Payment for freelance services (like photography, tutoring, or meal prep)
- Selling handmade items such as jewelry or crafts
- Flipping items (furniture, electronics) for profit
- Getting paid for ride-sharing, pet-sitting, or lawn care
Examples of Non-Taxable Personal Transactions:
- Splitting a dinner tab with friends
- Selling your used couch at a loss
- Roommates paying back shared bills
- Spouse transferring funds for utilities
- Group trip reimbursements
Even if you accidentally used a business account for personal payments, those transactions may still appear on your 1099-K. You’ll need to sort that out during tax filing.
IRS Reporting Thresholds: What Changed in 2024—and What’s Coming in 2025
The IRS has lowered the reporting thresholds for payment apps in recent years:
- 2023 tax year: $20,000 and 200+ transactions
- 2024 tax year: $5,000 in total business payments (no minimum transaction count)
- 2025 tax year: $600 in total business income—no matter the number of transactions
Some states have even lower thresholds, so check your state’s tax authority before filing.
How to File Taxes if You Received a 1099-K from Cash App
Step 1: Check Your Mail or Email for the 1099-K
Cash App may send the form via postal mail, email, or provide it through your online account.
Step 2: Report the Income on Your Federal Tax Return
Include the 1099-K total in your income reporting. If it includes personal payments, consult a CPA on how to separate them out.
Step 3: Report Misclassified Sales
If you accidentally sold a personal item (like a used laptop) through a business account, and it’s included in the 1099-K:
- Report the gross amount on Schedule 1 (Form 1040)
- Or report the loss on Form 8949 and Schedule D
What to Do If You Didn’t Receive a 1099-K—But Still Had Income
Even if you didn’t get a 1099-K, the IRS still expects you to self-report all taxable income. That includes payments received:
- Through Cash App, PayPal, Venmo, etc.
- By credit card or debit card
- For services provided in a business or freelance capacity
Failure to report your income can result in:
- Penalties for underpayment
- Interest on unpaid taxes
- Audits or further legal action
Can You Avoid Taxes by Using a Personal Cash App Account?
Not exactly.
Cash App doesn’t issue 1099-Ks for personal accounts, but it may flag activity that looks like business income. If that happens, they may:
- Freeze your personal account
- Ask you to open a business account
- Report suspicious transactions to the IRS
Always keep business and personal transactions separate—ideally with different accounts, emails, and phone numbers.
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Do the Same Tax Rules Apply to Venmo, PayPal, and Zelle?
Yes—for the most part.
- Venmo and PayPal follow the same IRS rules as Cash App and issue 1099-Ks for qualifying transactions.
- Zelle, however, does not issue 1099-K forms because it works through banks. That said, you’re still legally required to report any business income you receive via Zelle.
Final Tips for Taxpayers Using Cash App and Other Payment Apps
- Track your income year-round so you’re not surprised by a 1099-K.
- Keep personal and business transactions separate.
- Consult a tax professional if you’re unsure how to report certain payments.
- Don’t ignore payment app income—it’s more traceable than ever.
Coming Up in 2025: Prepare for the $600 Reporting Threshold
Starting next tax year, even small side hustles could trigger a 1099-K. Whether you made a few hundred bucks from tutoring or flipped old sneakers on the side, if you were paid through a mobile app, that income will likely need to be reported.
Make sure you’re tracking your earnings now, so you’re ready when it’s time to file next year.