Small business school hustle using Apple Cash - Should I worry about IRS knocking?

Yes, you need to report this income regardless of whether you receive a tax form. The reporting threshold for payment apps is $600 (changed from $20k in recent tax law updates), but even if you don't receive a 1099-K, you're still legally required to report all income earned. For your situation, you'd report this on Schedule C as self-employment income. You don't necessarily need a business license for this scale of operation in most jurisdictions, but you should check your local requirements to be sure. The good news is you can deduct legitimate business expenses against this income - any parts or supplies you purchased for tech repairs, software subscriptions used for work, a portion of your phone bill if used for business, etc. Just start keeping better records going forward - create a spreadsheet of income and expenses, and save receipts for any business purchases. For past income, your screenshots can work as documentation if needed. The IRS is unlikely to target such a small operation specifically, but if you're audited for other reasons, unreported income would be a problem.

So I was literally in this exact same situation last year with my campus side hustle. I was freaking out about my taxes and hoping the IRS wouldn't notice my Apple Cash payments. After stressing for weeks, I found this AI tax assistant at https://taxr.ai that saved me so much headache. I uploaded screenshots of my payment history and it automatically categorized everything as business income and even suggested deductions I hadn't thought about (like a percentage of my phone bill and laptop depreciation since I was using them for business). The tool walked me through reporting everything correctly on Schedule C and calculating my self-employment tax. What really helped was that it explained everything in simple terms instead of confusing tax jargon. Definitely made me feel more confident that I was doing things right.

Just wanted to follow up - I ended up trying taxr.ai for my freelance design income and it was surprisingly helpful. I was still skeptical but figured I'd try since my tax situation was getting complicated. The tool helped me categorize about $7,500 in sporadic income I'd received through various payment apps and even identified several legit business deductions I was entitled to. What I appreciated most was how it explained which expenses were fully deductible versus partially deductible (like my home internet). Saved me about $840 compared to what I would've paid without proper deductions. Definitely changed my mind about AI tax tools!

If you're worried about the IRS coming after you (which is a valid concern since they're increasing enforcement), you might need to talk to someone at the IRS directly to get clear guidance. I needed to do this for my side business and it was IMPOSSIBLE to get through on their phone lines - kept getting disconnected after waiting for hours. I eventually used https://claimyr.com to get through to an actual IRS agent. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically they navigate the phone system for you and call you back when they have an agent on the line. I was super skeptical but it actually worked. The agent I spoke with clarified exactly how to report my mixed income (some W-2, some 1099, some unpaid cash jobs) and what documentation I needed to keep. Definitely worth it for the peace of mind knowing I'm doing everything correctly.

Had to come back and admit I was wrong about Claimyr. After weeks of failing to get through to the IRS about my unreported side income situation, I reluctantly tried it. Within about 90 minutes, I got a call back with an actual IRS representative on the line. The agent walked me through exactly how to report my Apple Cash and CashApp income even though I hadn't received any 1099 forms. They explained what records I needed to keep and how to amend my previous return where I'd missed reporting about $3,200 in side income. Saved me from potential penalties down the road and honestly the peace of mind was worth it. Sometimes my skepticism gets the better of me!

Remember that with a small business like this, you can deduct legitimate business expenses! I do web design on the side and track everything - portion of internet bill, new computer equipment, software subscriptions, etc. Easily cuts my taxable income by 30-40%. Just make sure you have receipts for everything in case of an audit.

Has anyone here actually been audited for small side hustle income? I'm curious how common it really is for the IRS to come after people making under $5k on payment apps.

The $600 threshold is definitely real now - I learned this the hard way when I got a 1099-K for my pet sitting side business last year. Even though you might not get the form, you're still required to report all income. One thing that really helped me was setting up a separate savings account and putting aside about 25-30% of each payment for taxes (covers both income tax and self-employment tax). That way when tax time comes, you're not scrambling to find money to pay what you owe. Also, don't stress too much about perfect record keeping for what's already happened - the IRS accepts reasonable documentation. Your Apple Cash screenshots showing dates, amounts, and who paid you should be sufficient. Just start keeping better records going forward with a simple spreadsheet tracking income and any business expenses. You're being smart by thinking about this now rather than ignoring it. Most people in your situation who run into trouble are the ones who never report anything at all, not the ones trying to do things right.

The key thing to remember is that you're already ahead of most people by thinking about this proactively! I run a small freelance writing business and went through this same panic when I first started making money through payment apps. A few practical tips from my experience: 1. Yes, you need to report this income on Schedule C regardless of whether you get a 1099-K form. The $600 threshold just determines if payment processors send you and the IRS a form, but your obligation to report income hasn't changed. 2. For documentation, your Apple Cash screenshots are actually fine - just make sure they show the date, amount, and ideally what the payment was for. Create a simple spreadsheet now with columns for date, amount, client/description, and keep it updated going forward. 3. Don't forget about business deductions! Things like repair supplies, any software you use for tutoring, a portion of your phone bill, even some textbooks if you reference them for tutoring could potentially be deductible. 4. Consider opening a separate checking account for your business income. Makes tracking so much easier and looks more professional if you ever do get audited. You don't necessarily need a business license for this scale, but check your college's policies too - some schools have rules about students running businesses on campus or in dorms. The IRS isn't going to come knocking down your door over $4,800, especially if you report it properly. Just get organized now and you'll be fine!