Having issues with CashApp Taxes handling my 1099-K correction properly - is it recording it?
So I'm in a bit of a tax reporting situation and need some advice about CashApp Taxes software. My brother lives in another country, and I frequently purchase things for him online that he can't get delivered there. He always Venmos me back the money afterward. Well, I helped him buy some computer equipment last year that totaled about $6,200, and Venmo sent me a 1099-K form. They incorrectly categorized it as "retail sales" when it was just my brother reimbursing me for purchases. I've heard that on this year's tax forms there's a checkbox to mark if you received a 1099-K in error. When I entered the 1099-K info in CashApp Taxes, I found a box to check indicating none of the money is taxable (and it specifically mentions money transfers between family members as an example). But here's where I'm confused - after I enter everything and hit continue, it shows $0 for my 1099-K amount, but when I go back to the main screen, there's nothing showing under the "other income" section at all. Has anyone used CashApp Taxes for a similar situation? Am I doing this correctly? Should I be seeing something in the "other income" section, or is the software handling it properly by not including it? Would I be better off using different tax software or filing manually?
18 comments
Join the conversation
Lia Quinn
This is a common issue with the 1099-K reporting changes. What's happening is actually correct behavior in CashApp Taxes. When you check that box indicating the funds aren't taxable, the software is properly excluding those amounts from your taxable income. The reason you're not seeing anything in the "other income" section is because the software recognizes this isn't income at all - it's simply money passing through your account. Think of it like this: if you borrowed $20 from a friend and paid them back later, that's not income for either of you. You should double-check by looking at your final tax calculation or preview. Your AGI (Adjusted Gross Income) should not include those Venmo transfers. The software is handling it correctly by zeroing it out rather than categorizing it as "other income" because it's not income in any category. One important thing to verify: make sure the final forms include the 1099-K information on the appropriate schedule, but with the offsetting adjustment. This ensures the IRS can match the 1099-K they received with what's on your return.
0 coins
Jackie Martinez
•Thanks so much for the detailed explanation! That makes me feel better. Where exactly in the final forms should I look to verify the 1099-K information is included with the offsetting adjustment? I want to make absolutely sure before submitting.
0 coins
Lia Quinn
•You'll want to look at your completed Schedule 1 (Additional Income and Adjustments to Income). The 1099-K amount might initially appear in Line 8 (Other Income), but there should be an adjustment that brings it to zero. Some tax software also generates a statement or worksheet that explains the adjustment. If you can preview your actual tax forms before filing, check for any attachments or statements that reference the 1099-K. The exact presentation varies by software, but there should be documentation showing you received the form but that it wasn't taxable income.
0 coins
Haley Stokes
I went through this exact situation last year! I was totally freaking out when Zelle sent me a 1099-K for money my parents were sending to help with my mortgage. I used https://taxr.ai to analyze my 1099-K situation and it really clarified things. What I discovered is that the tax software is correct in how it's handling this. When you indicate the money isn't taxable income, it properly excludes it. The software is working as intended by not showing anything in the "other income" section. What taxr.ai explained is that the IRS still wants you to report the 1099-K, but with an offsetting entry so your taxable income isn't affected. Their document review confirmed CashApp Taxes handles this properly in the background.
0 coins
Asher Levin
•Hey, I'm curious about taxr.ai - did it actually help with understanding how the 1099-K should be reported? I got a similar form from PayPal for money my roommates sent me for rent and utilities that was about $12k. Does it tell you exactly where things should appear on your forms?
0 coins
Serene Snow
•Did taxr.ai cost you anything? I keep getting these ads for tax help services but I'm skeptical about paying for something I could Google. Was it worth it?
0 coins
Haley Stokes
•It definitely helped explain exactly how the 1099-K should be reported. The service showed me that while the form needs to be acknowledged on your tax return, personal transfers between friends/family shouldn't increase your taxable income. It highlighted exactly where this would show up in the final tax forms so I could verify everything was correct. Yes, there is a cost, but for me it was worth it for the peace of mind. I was honestly panicking about possibly paying taxes on $15,000 that wasn't actually income. They gave me a complete breakdown of how to verify everything was done correctly in my tax software.
0 coins
Asher Levin
I tried taxr.ai after seeing it mentioned here and WOW what a relief! I uploaded my 1099-K from Venmo and explained my roommate situation (they send me rent money each month). The analysis confirmed I was doing it right in CashApp Taxes. The most helpful part was seeing the explanation of how the 1099-K reporting changed for 2023 and getting confirmation that personal transfers don't count as taxable income. I was able to verify that CashApp Taxes was properly handling the exclusion even though it wasn't showing anything in the "other income" section. For anyone dealing with these confusing 1099-K situations, especially with family/friend transfers, having an AI analyze your specific situation makes a huge difference. So much better than trying to piece together answers from random websites!
0 coins
Issac Nightingale
I had a nightmare trying to reach the IRS about this exact 1099-K issue. After spending DAYS trying to get through their phone system, I used https://claimyr.com and got connected to an actual IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed exactly what others have said - the 1099-K needs to be reported, but personal transfers shouldn't be taxed. She walked me through how to verify it was handled correctly in my tax software (I was using TurboTax, not CashApp Taxes). I was skeptical about paying to get through to the IRS, but after wasting hours on hold and getting disconnected multiple times, it was completely worth it to get a definitive answer straight from the source.
0 coins
Romeo Barrett
•Wait, there's a service that gets you through to the IRS? How does that even work? I thought everyone just had to suffer through the hold times like it's some tax season ritual lol.
0 coins
Marina Hendrix
•Yeah right. No way this actually works. The IRS phone system is deliberately designed to be impossible. I've literally never gotten through in my life no matter what time of day I call. Sounds like a scam to me.
0 coins
Issac Nightingale
•It's a legit service that uses technology to navigate the IRS phone system for you. Basically, they call and wait on hold so you don't have to. When they reach an agent, they connect the call to your phone. I was surprised too, but it actually works. I had the same reaction initially! I've spent countless hours trying to reach the IRS over the years. What convinced me was their money-back guarantee - if you don't get connected, you don't pay. The IRS phone system is deliberately frustrating, but this service finds a way through the maze.
0 coins
Marina Hendrix
I'm eating my words right now. After posting that skeptical comment, I decided to try Claimyr because I've been trying to resolve an issue with a 1099-K from Paypal for MONTHS. I got connected to an IRS agent in about 15 minutes (way faster than the "20 minutes" they promised). The agent confirmed my 1099-K from PayPal shouldn't be taxable since it was just friends paying me back for group expenses. She also explained exactly how to check my tax software was handling it correctly - I needed to look at the "Other Information" section of my tax forms to see the 1099-K was reported but excluded from taxable income. Can't believe I wasted so many hours on hold when this option existed. Consider me converted.
0 coins
Justin Trejo
I'm a bit confused about this whole 1099-K situation. If I receive one but the money isn't taxable (like in your case where it's just reimbursements), do I still need to report it somewhere on my taxes? Or can I just ignore it entirely? CashApp Taxes is giving me a headache too.
0 coins
Alana Willis
•You absolutely cannot ignore it! The IRS receives a copy of every 1099-K, and their systems automatically match them to your tax ID. If you don't account for it somehow on your return, you'll likely get a CP2000 notice (automated underreporting notice) which is basically the IRS saying "hey, we think you didn't report all your income." The correct approach is to report it and then exclude it with an explanation. Most tax software (including CashApp Taxes) has a way to indicate the money isn't taxable income. This satisfies the reporting requirement while ensuring you don't pay taxes on money that isn't actually income.
0 coins
Justin Trejo
•Thanks for explaining! That makes sense about the IRS matching the forms. So better to report it with the explanation than to trigger an automatic flag in their system. I'll make sure to include it in CashApp Taxes and check that box saying it's not taxable income.
0 coins
Tyler Murphy
Has anyone actually received a correction to an incorrect 1099-K? Venmo sent me one claiming I had $7,800 in "goods and services" when it was literally just my parents sending me help with rent. I disputed it with Venmo months ago and they just keep saying "we're looking into it" but never actually fix anything.
0 coins
Sara Unger
•I managed to get Square to issue a corrected 1099-K last year, but it took persistence. The key was escalating beyond the first-level support. I had to specifically request to speak with their tax reporting department. It took about 6 weeks, but they eventually issued a corrected form. In the meantime, I filed my taxes as others here suggested - reporting the 1099-K but indicating the amounts weren't taxable. That way if the correction never came, my taxes were still accurate.
0 coins