# Cash App Taxes Review 2022: Understanding Tax Implications for Cash App Users
As more people turn to mobile payment apps like Cash App, it’s important to understand the tax implications of using these services. In this blog post, we’ll explore what Cash App users need to know about taxes in 2022.
## How Cash App Works
Cash App is a mobile payment app that allows users to send and receive money from friends and family. Users can link their bank accounts or debit cards to the app and transfer money instantly. They can also use the app to buy and sell Bitcoin and other cryptocurrencies.
## Cash App Taxes: What You Need to Know
Cash App users need to be aware of the following tax implications:
### 1. Cash App Transactions Count as Taxable Income
Any money you receive through Cash App is considered taxable income by the IRS. This includes both peer-to-peer transactions and Bitcoin transactions.
### 2. Cash App Reports Transactions to the IRS
Cash App is required by law to report transactions to the IRS if they exceed certain thresholds. This means that if you receive more than $20,000 in gross payments and receive more than 200 transactions in a calendar year, Cash App will send you a 1099-K form.
### 3. You May Need to Pay Self-Employment Tax
If you use Cash App for business purposes, you may need to pay self-employment tax on your earnings. This applies if you receive more than $400 in a year from Cash App transactions.
### 4. You Can Deduct Cash App Fees
Cash App charges a fee for certain transactions, such as instant transfers. These fees can be deducted on your tax return as a business expense if you use Cash App for business purposes.
### 5. Keep Accurate Records
It’s important to keep accurate records of all Cash App transactions, including the date, amount, and purpose of the transaction. This will make it easier to report your income and expenses on your tax return.
## FAQs
### Q: Do I need to pay taxes on money I send through Cash App?
A: No, only money you receive through Cash App is considered taxable income.
### Q: What if I only use Cash App for personal transactions?
A: You still need to report any income you receive through Cash App on your tax return.
### Q: How do I report Cash App transactions on my tax return?
A: You can report Cash App transactions on your tax return using Form 1040, Schedule C (for self-employed individuals) or Schedule 1 (for individuals who receive income from sources other than wages).
### Q: Can I deduct Cash App fees on my tax return?
A: Yes, you can deduct Cash App fees on your tax return as a business expense if you use Cash App for business purposes.
### Q: What happens if I don’t report Cash App transactions on my tax return?
A: Failure to report Cash App transactions on your tax return can result in penalties and interest charges from the IRS.
## Conclusion
Cash App is a convenient way to send and receive money, but it’s important to understand the tax implications of using this service. By keeping accurate records and understanding your tax obligations, you can avoid potential problems with the IRS and ensure that you’re in compliance with tax laws.