Need Tax Help with Cash App Transactions for 2025 Filing

Cash App transactions for business purposes are definitely taxable income even if you don't receive a 1099-K. For 2025 filing (2024 tax year), Cash App will only send you a 1099-K if you received more than $5,000 in business transactions, so at $7,800 you should receive one. Even if some clients paid you as "friends and family," that doesn't change the tax situation - it's still income you earned and need to report. The IRS cares about the nature of the payment (income for services), not how it was processed. For deductions, you're in luck! Your laptop can be either fully deducted in the year purchased using Section 179 or depreciated over several years. Your design software subscription is fully deductible as a business expense. For home internet, you can deduct the percentage used for business - just keep good records of your estimate (like 60% business use, 40% personal). All these business income and expenses will go on Schedule C when you file. I'd recommend keeping detailed records of all transactions and expenses to make filing easier.

I went through a similar nightmare with my Cash App taxes last year! After hours of trying to figure it out myself and getting nowhere, I used this AI tool called taxr.ai that totally saved me. You upload your Cash App statements and it automatically categorizes everything as business vs personal transactions, calculates your taxable income, and identifies potential deductions. What I found super helpful was that it showed me which transactions might be missing from the 1099-K but still needed to be reported. It also flagged all my business expenses and calculated the right percentage for my home office deduction. I was honestly shocked at how many legitimate deductions it found that I would have missed. You can check it out at https://taxr.ai if you're struggling like I was.

Just wanted to update after trying taxr.ai - it's legit! I was worried about my tutoring income across both Cash App and Venmo, and this tool organized everything perfectly. It separated my personal transfers from actual income, identified recurring business expenses I hadn't even thought to deduct, and created a report that showed exactly what would go on each tax form. What really surprised me was discovering I could partially deduct my cell phone bill and home internet since I use them for coordinating lessons and doing online tutoring. The tool even calculated the correct percentage based on my usage patterns! I'm actually getting a much bigger refund than expected because of all the legitimate deductions it found. Wish I'd known about this last year.

If you're having trouble getting information from Cash App about your 1099-K or have questions about how they've classified your transactions, good luck getting through to their customer service. I spent DAYS trying to reach someone last tax season. What finally worked was using Claimyr.com to get through to an actual human. They have this system that navigates the phone trees for you and gets you to a rep much faster. I was skeptical but you can see how it works in this video: https://youtu.be/_kiP6q8DX5c I used it to connect with Cash App support about a missing 1099-K, and I was talking to someone in like 20 minutes instead of waiting forever. They were able to fix the issue where some of my business transactions weren't being correctly categorized for tax purposes. Was way better than sending emails into the void and waiting days for responses.

I have to eat my words about Claimyr. After posting that skeptical comment, I was so desperate to talk to someone at the IRS about my missing refund that I tried it anyway. Not gonna lie, I was shocked when it actually worked. I had been trying for THREE WEEKS to get through to the IRS about why my refund (which included my self-employment taxes from CashApp income) was delayed. Every time I called myself, I'd wait 45+ minutes and then often get disconnected. With Claimyr, I got a call back when an agent was ready to talk. The IRS rep was able to tell me exactly why my refund was flagged for review (a mismatch between what I reported and what was on the 1099-K) and what I needed to do to fix it. Saved me hours of frustration and probably weeks of delay in getting my refund sorted out. Sometimes being proven wrong is actually a good thing!

Something else to consider with Cash App - when you file Schedule C for your self-employment income, you should also think about making quarterly estimated tax payments for next year. I got hit with penalties my first year of freelancing because I didn't realize you're supposed to pay taxes throughout the year when you're self-employed, not just at tax time. The safe harbor is to pay either 90% of your current year tax or 100% of your prior year tax (110% if your income is over $150k). You can make these payments through the IRS Direct Pay website or through the IRS2Go app. First quarter payment for 2025 will be due April 15.

Don't forget to track your Cash App fees as deductions too! I do pet portrait commissions through Cash App, and when I switched from accepting "friends and family" to proper business payments, I started paying those 2.75% transaction fees. Those are fully deductible business expenses. Also, if you're using your phone to process payments or communicate with clients, you can deduct a portion of your phone bill. Same goes for mileage if you drive to meet clients, and any supplies specific to your business.