Which Cash App Payments Are Taxable
The reason someone paid you decides whether you owe tax. Money you get as a gift or as repayment for a personal expense generally isn’t taxable income. Money you get for selling goods or providing services is taxable.
| Payment type | Example | Taxable? |
|---|---|---|
| Gift | Birthday or holiday money | No |
| Shared cost | Splitting a meal or car ride | No |
| Personal repayment | A roommate paying you back for rent | No |
| Goods or services | Payment for side gig work or products you sell | Yes |
| Personal item sold at a loss | Selling a used couch for less than you paid | No, and you can’t deduct the loss |
| Personal item sold at a gain | Selling jewelry for more than you paid | Yes, on the profit |
Your profit on a personal item is the sale price minus what you originally paid. The IRS suggests labeling personal payments as non-business in the app when possible.
When You Get a Form 1099-K
A Form 1099-K is an information return, which is a form that reports payments you received to both you and the IRS. Under the current 1099-K threshold, a payment app must send one if your goods-and-services payments total over $20,000 in more than 200 transactions. An app may also send one for lower amounts. Payment apps must send your copy by January 31.
The form shows your gross amount received, meaning the total before fees or refunds. A payment on the form isn’t automatically taxable, and you can subtract fees and refunds from the gross amount.
If a form wrongly includes gifts or reimbursements, contact the app and ask for a corrected form that does not include these amounts. Don’t delay filing your return while you wait. These rules cover all payment apps, so even if PayPal sends a 1099, the same logic applies.
How Side Gig Income Is Taxed
If people pay you for work or buy products from you, the IRS considers you a sole proprietor, meaning a one-person business owner. You report that income on Schedule C, the form for business profit or loss.
Once your net earnings (income minus business expenses) reach $400 or more, you also owe self-employment tax. That tax covers Social Security and Medicare at a 15.3% rate, and you figure it on Schedule SE. You can deduct half of your SE tax when figuring your adjusted gross income (AGI), which is your total income minus certain adjustments. You may also need to make quarterly estimated tax payments.
Tax Forms for Stock and Bitcoin Sales
If you sold stock or bitcoin through a broker, the company that holds and trades investments for you, you may get another form. Check your app’s tax documents to see what it sent. Common tax forms include:
- Form 1099-B - reports proceeds from stock sales, and in some cases your cost basis. You report these sales on Form 8949 or Schedule D.
- Form 1099-DA - reports proceeds from digital asset sales, such as bitcoin, for transactions on or after Jan. 1, 2025.
Cost basis is generally what you paid for an investment. You subtract it from the sale price to find your capital gain or loss. If you held bitcoin for one year or less, the gain is short-term, and more than one year makes it long-term.
For 2026 sales, brokers report cost basis on Form 1099-DA only for certain crypto acquired this year. If you transferred crypto from another wallet or bought it before 2026, you’ll still need to calculate your cost basis yourself before filing. You also have to report bitcoin sales even if no form arrives.
Filing Deadline for 2026 Returns
The tax deadline for 2026 returns is April 15, 2027. Gather any 1099-K, 1099-B or 1099-DA forms before then, and compare them with your own records.
