Cash App

A small group that was in transition toward becoming a 501(c)(3) was using my personal cash app until they became official. They now have their own Cash App business account and are officially a 501(c)(3).

 

However, I have $2,353.94 from May 2022 of income that is actually for that 501(c)(3) through my Cash App. They have said that they are willing to either claim that as their income or pay me whatever taxes I have to pay on that income because it is technically their income.

 

What is the best way to go about this? Personally, I would rather give that statement to them and let them file it under their business and have them pay the taxes on it since it belongs to them anyway. 

 

What should I do here?

Laura_CPA
Employee Tax Expert

Self employed

Hi JR301, 

 

Cash App does not issue Form 1099-K for payments made to Cash App personal accounts. Therefore, you will give the amount to the 501(c)(3), so that they can claim it on their tax return. Have you already send it to them? If not, you can send the money to their Cash App business account and they will receive a Form 1099-K. If you have already done so, then you'll disclose the amount to them, so they can report it to the IRS. 

 

Thank you for sharing! 

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Self employed

Perfect! Thank you.

Self employed

If you do get a 1099-K, that by itself does not make it taxable, it depends on the circumstances and in this case, it's not taxable income.  However, you would have to explain the 1099-K to the IRS, and there are a couple of ways to do that.  Ask back here in February if you need to. 

 

A separate issue that could come up is that if people were donating to charity through your personal account, you must not be giving receipts indicating it was a tax deductible donation.  That's for the organization to do, and whether or not they can issue a deduction receipt for gifts before they are registered is complicated.  But it's also their problem, as long as you did not personally offer tax deductible donation receipts. 

Laura_CPA
Employee Tax Expert

Self employed

You're very welcome, have a good day 🙂 

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