Episode 2 | 2 Mins
Using Payment Apps in Your Business
If you’re using Cashapp, PayPal, Venmo or Facebook payments in your business to accept payments or pay vendors you need to do a few extra steps to make sure that you’re properly reporting all of your income & expenses at tax time.
Today’s tax talk is about Cash App, Venmo. And PayPal.
If you are using these apps to collect income from your customers or even pay your vendors, and you’re not using the business version of these apps, I want you to understand at least two things.
One, you may be violating the terms of service of these apps, because typically they are only for person to person and not business transactions.
And two, if you are using the personal version of these apps, then you should at the very least, be keeping a record of your income and expenses that go through those accounts that are related to your business. Because if you don’t, then you’re either going to spend a lot of time during tax season to go through those transactions and determine which one is which one Our business and which ones are personal so that you can complete your tax return, or you’re going to pay somebody like me a lot of money to do it for you.
So what you should be doing is using the business version of those apps. So that one, if you have enough transaction or enough volume that goes to that account, you actually get a tax form at the end of the year. But just in case you don’t get a tax form doesn’t mean that you don’t have to report the income, FYI. And so that you can have a separate record of all of the information that goes through or all the transactions that go through those accounts.
You should always be keeping it separate records of your income and expenses anyway, because you want to make sure that you are reporting accurate numbers on your tax return.
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