Do I have to pay income tax on Cash App deposits over $600? Tax implications compared to eBay income

The $600 reporting threshold applies to payment apps like Cash App, Venmo, and PayPal (including eBay payments processed through PayPal) under current tax rules. This means if you receive more than $600 in a calendar year on any of these platforms, they'll issue a 1099-K to both you and the IRS. But here's the important part - receiving a 1099-K doesn't automatically mean those funds are taxable! The 1099-K simply reports the gross amount received. If you're just selling personal items for less than you paid for them (like that garage cleanout you mentioned), those sales generally aren't taxable income. What matters is why you're receiving the money. Income from selling items for more than you paid, providing services, or business activities is taxable - regardless of whether you get a 1099-K or not. The platform you use to receive funds doesn't change the tax treatment of the underlying transaction.

After dealing with the exact same confusion last year, I found an amazing tool called taxr.ai (https://taxr.ai) that completely saved me from the 1099-K nightmare. I was getting forms from PayPal, Venmo AND Cash App for selling my old collectibles and furniture after downsizing. The tool analyzed all my 1099-Ks and helped me figure out which transactions were actually taxable vs just selling personal stuff at a loss. It even helped me document everything properly in case of an audit. Their AI looks at all your documents and explains exactly what you need to report where on your taxes.

Just wanted to update after trying taxr.ai that I mentioned in the thread above. I was super skeptical about how it would handle my situation with both Cash App and eBay sales, but it actually worked amazingly well! Uploaded my 1099-Ks from both platforms and it helped me separate my casual sales (old clothes, electronics, etc.) from the few items I actually made a profit on. The documentation it created for my records is detailed enough that I'm not worried about an audit anymore. The best part was that it explained why some of my transactions weren't taxable even though they appeared on the 1099-K forms. Saved me from overpaying hundreds in taxes! Definitely recommend for anyone dealing with these payment app reporting changes.

If you're getting stuck in circles with the IRS about this Cash App/multiple platform reporting issue, try Claimyr (https://claimyr.com). I wasted DAYS trying to get through to the IRS to explain my situation with Cash App transactions that weren't actually income, just reimbursements from roommates. Claimyr got me connected to an actual IRS agent in about 15 minutes instead of the usual 2+ hour wait or getting disconnected. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent walked me through exactly how to report the 1099-K amounts without paying taxes on money that wasn't actually income. Worth every penny after I'd already spent hours trying to get through myself.

I'm back to admit I was totally wrong about Claimyr. After my skeptical comment above, I got frustrated enough with my own Cash App tax situation that I decided to try it anyway. Shockingly, it actually worked exactly as advertised. I got connected to an IRS representative in about 20 minutes when I had been trying unsuccessfully for days. The agent confirmed that I don't need to pay taxes on the money my roommates sent me through Cash App for utilities even though I got a 1099-K. They walked me through how to properly report it on my return to avoid triggering any automatic flags. Saved me from potentially overpaying hundreds in taxes on money that wasn't actually income. I'm genuinely impressed.

Just a quick heads up - the threshold was SUPPOSED to drop to $600 last year, but it actually got delayed again. For the 2024 tax filing season (2023 transactions), the reporting threshold remained at $20,000 AND 200 transactions. But for 2025 filing (2024 transactions), it's definitely dropping to the $600 level. So if you're getting close to $600 in 2024, start preparing now. The IRS has repeatedly delayed the change but it's finally happening.

Super confused... I sell vintage clothes as a side business through Instagram and take Cash App. Does this mean I'm double taxed compared to if I just use my online shop with regular credit card processing?

One thing that really helped me understand this was realizing that the 1099-K forms are just information reports - they don't determine what's taxable, they just tell the IRS what you received. The actual tax treatment depends on the nature of your transactions. For your situation with both eBay and Cash App, you'll likely get separate 1099-K forms from each platform if you exceed their thresholds. But when filing taxes, you report the income based on what it actually is - not which platform reported it. So if you're selling personal items at a loss on both platforms, neither would be taxable income even if both platforms send you 1099-Ks. The key is keeping detailed records of what you originally paid for items versus what you sold them for. This way you can properly report the gross amounts from your 1099-Ks while also documenting that most transactions weren't actually taxable income. It's more paperwork, but it prevents you from overpaying taxes on money that isn't really income.

This is such a common source of confusion! The key thing to remember is that the reporting threshold and tax liability are two separate issues. Even though Cash App and eBay may both send you 1099-K forms, you're not being "double taxed" - you're just getting multiple reports of income that may or may not actually be taxable. Since you mentioned you're just selling personal items from a garage cleanout, most of these transactions likely won't result in taxable income if you're selling things for less than you originally paid. The platforms are required to report payments to you, but that doesn't make those payments taxable income. Here's what I'd recommend: Keep a simple spreadsheet tracking what you sold, which platform you used, approximately what you originally paid for each item, and what you sold it for. This will help you when tax time comes to properly report the 1099-K amounts while also documenting which transactions were actually at a loss (and therefore not taxable). The good news is that for casual sellers like yourself, the vast majority of these transactions typically end up being non-taxable personal losses rather than taxable income.