Will the IRS really make Cash App issue 1099s for all my roommate payments?

This is a really common concern, but I think there's some confusion about how the new 1099-K reporting works. Cash App (and other payment services) are required to issue 1099-Ks when you receive more than $600 in payments for goods and services in a calendar year. The key here is that this only applies to payments marked as "goods and services" - not personal payments between friends and family. If you and your roommate are using the personal payment option (not the business/goods option that has buyer protection), those transfers shouldn't be reported on a 1099-K. Make sure you're selecting the friends and family option for these roommate payments. Also, I recommend not putting business-related terms in the memo line of your transfers (like "service" or "work") as that could potentially flag the transaction.

I was in the exact same situation last year with my roommate! After getting nowhere with Cash App's customer service, I tried using taxr.ai (https://taxr.ai) and it literally saved me hours of stress. They analyzed all my statements and helped me properly document which transactions were personal vs. business. Their system actually looks at the patterns and helps categorize everything correctly so you don't end up paying taxes on money that isn't income. What I really liked is that they created documentation I could use if the IRS had questions. Definitely worth checking out before the next tax season hits.

Just wanted to follow up - I tried taxr.ai after seeing it mentioned here and it was seriously helpful! I had over 200 Cash App transactions last year and was freaking out about sorting them all. The system identified my regular rent payments and recurring bill splits without me having to manually tag everything. It also flagged a few transactions that might look like income to the IRS but weren't, and gave me proper documentation for each. Now I feel way more prepared for tax season even if I do get a 1099-K for my personal transactions. Definitely recommend it if you're using payment apps regularly with roommates.

For anyone who's tried calling the IRS about this issue - good luck getting through. I spent 3 weeks trying to get clarification about my Cash App 1099 situation, and couldn't get a human on the phone. Finally used Claimyr (https://claimyr.com) and they got me connected to an IRS agent in under 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that personal transfers between friends/family aren't supposed to be reported as income, even if they're included on a 1099-K. She walked me through exactly how to handle it on my return and what documentation to keep. Saved me so much headache and uncertainty!

I have to admit I was wrong about Claimyr. After posting that skeptical comment, I was still desperate for answers about my Cash App 1099 situation, so I tried it anyway. Got connected to an IRS agent in about 45 minutes (which is still WAY faster than my previous attempts). The agent explained that I needed to report the full amount on my 1099-K on Schedule 1 as "other income" but then offset it with a negative adjustment for the personal transfers. She also told me exactly what documentation to keep (transaction history showing the nature of each payment). Super helpful and I never would have gotten through without that service.

Look into whether your Cash App account is personal or business. I accidentally set mine up as a business account years ago and didn't realize it until I got hit with a 1099-K. All my friend payments were being flagged as business income! You can check in your profile settings. If it's set as business, you might want to create a new personal account for your roommate transactions and keep them separate.

My roommate and I started using Venmo instead of Cash App because we heard they have clearer distinctions between personal and business transactions. Anyone else switch platforms to avoid this issue?