The Cash App has become an increasingly popular way for people to receive payments and manage their finances. If you received income through the Cash App in 2023, you may be wondering how to maximize your tax refund when filing taxes in 2024. Follow these 5 tips to get the biggest possible refund sent straight to your Cash App account.
1. Accurately Report All Income
It is crucial to report all taxable income received through the Cash App on your 2024 tax return, including payments from side hustles, freelance work, goods or services sold, and any other earnings. Keep detailed records of all your Cash App transactions throughout the year to accurately calculate your cost basis and deduct any eligible business expenses. The IRS requires you to report all income, so failing to do so can lead to penalties, fees, and potential audits down the line.
2. Choose the Right Filing Status
Your filing status plays a major role in determining your available deductions, tax rates, and eligibility for certain credits. If you qualify, consider filing as head of household rather than single or married filing separately. Head-of-household filing status provides a higher standard deduction and more favorable tax brackets compared to other statuses.
3. Claim All Eligible Tax Credits
Take advantage of refundable tax credits you may qualify for based on your income and family situation, which can significantly boost your tax refund amount. The Earned Income Tax Credit (EITC) provides substantial refunds for low-to-moderate-income workers. The Child Tax Credit (CTC) also offers thousands back for households with children under the age of 17.
4. Maximize Above-the-Line Deductions
Every dollar you deduct above-the-line directly reduces your taxable income, leading to greater tax savings. Be sure to deduct all eligible business expenses, education expenses, health savings account contributions, and retirement plan contributions if you make them.
5. Deposit Refund to Cash App
The fastest way to get your refund is to have it directly deposited into your Cash App account. Selecting this option when e-filing means you’ll receive your refund in as little as 5 days, rather than waiting weeks for a paper check. It’s the ideal way to maximize convenience while getting cash back quickly.
Following these tips can lead to major savings on your 2024 taxes while maximizing the refund sent straight to your Cash App wallet. Maintain thorough records, choose the optimal filing status, leverage tax credits, take all deductions allowed, and arrange direct deposit for a smooth tax season.