Cash App Taxes Review: Free and Convenient Deposit
GOBanking Rates Score
Quick take: Cash App provides a simple, secure and free alternative to electronic tax filing. Taxpayers with relatively simple returns will benefit from its easy-to-use interface.
How did we calculate this?
- Free service, no upgrade costs
- Fast processing of refunds
- Guarantees accuracy
- Provides free audit defense if needed
- Not suitable for more complex declarations
- Requires registration to the Cash App service
- Limit reimbursement on accuracy to $1,000
- Lack of customer support by phone
Cash app tax overview
The complex and time-consuming drudgery of filing annual income tax returns just got a little easier with the advent of the internet and electronic filing. The Internal Revenue Service began accepting tax returns electronically in 1986, when 25,000 returns were uploaded by five tax preparation services. By 2021, approximately 100 million taxpayers were using electronic file services each year to streamline the filing process and get faster refunds.
Cash App has been offering an electronic tax filing service since November 2020, when its parent company, Square, acquired and renamed the tax service provided by Credit Karma.
Cash App Taxes Features
We measured four key attributes of electronic tax filing services – cost, simplicity, security and accuracy – and scored Cash App among the leaders in this personal finance category.
No taxpayer wants the electronic filing process to add to the financial burden of paying taxes. Although many Authorized Electronic Filers claim to offer a free experience, many resell their services for more complicated returns. Cash App Taxes is unique in that there are no charges for overtime or higher service levels.
Cash App does not charge for upgrades for:
- Itemized deductions listed in Appendix A
- Investment income reported on Schedule B
- Schedule C self-employment income
Competing services may also charge for electronic filing of state returns, while Cash App allows free state filing. As of March 2022, Cash App supports state returns for 40 states and the District of Columbia. One caveat: users must file federal returns in order to obtain state returns.
Taxes are complicated and confusing enough, so an important feature of any e-filing service is its ease of use.
Cash App offers its tax return from a button placed directly on its home screen. The app guides users through a series of basic questions about their employment, income, and expenses. Users respond by clicking buttons or typing numbers.
The application then creates a series of IRS forms with the appropriate numbers filled out. Users can view the forms on screen or download them as PDF files. The app displays the resulting balance owing or refund amount before uploading the forms directly to the IRS.
Also making the process easier for former Credit Karma tax filers, Cash App provides access to previous tax filers upon request.
Security is a major concern when doing personal financial business on the Internet. Tax returns, of course, are full of data useful to hackers, including social security numbers, addresses, phone numbers, employment information, and a myriad of financial details. Electronic filers must ensure that all such information remains confidential.
The first step is to locate an electronic file provider authorized by the IRS. The agency offers a practical service tool which allows taxpayers to search for these providers by taxpayer postal codes. In major urban areas, the list will include dozens of accounting, tax and other financial firms.
The IRS sets detailed security standards for these authorized providers, including Cash App. The company uses 128-bit encryption. This is the standard used by the National Security Agency to protect secret information. Cash App has a dedicated security team, while third parties monitor the site for possible vulnerabilities and malicious actors. The app also requires two-factor authentication every time a user logs in.
The accuracy of any tax return is a big concern for taxpayers, who know that even experienced tax professionals sometimes have trouble navigating and understanding the federal tax code. An error on a return can be aggravating, especially if the error results in a higher tax bill or a lower refund.
The Cash App tax service claims to guarantee 100% accuracy. The service is backing its claim by guaranteeing users the largest refund possible. If a larger refund is made through an amended return filed by another tax department, Cash App will refund a minimum of $25 and a maximum of $1,000 to the taxpayer in the form of a gift card.
Cash App provides free consultation in the event of an IRS audit of a tax return filed through the app.
Five star service
Performance in these four important categories earns Cash App a five-star rating for those with simple and straightforward tax situations. Some taxpayers may require a more robust e-filing service as Cash App does not support foreign tax credit, K-1 forms for those with income from a trust or partnership , or foreign earned income over $600. Cash App also does not provide tax experts for consultation.
Users can expect a free, simple, and secure Cash App experience while enjoying faster refunds than is possible with mail-in returns. While Cash App can’t guarantee when the IRS will complete the process, the service relies on 2020 data to claim a five-day average improvement over traditional banks from deposit to receipt of refund. Plus, by setting up direct deposit on the app itself, a refund from the IRS becomes available immediately – unlike a typical two-day wait for a bank to process funds received.
Cash App requires tax users to download and register for the app. It also works better for those used to doing their own taxes, as the e-filing feature also lacks phone customer support. With these caveats, Cash App now provides one of the best e-deposit services available.
Good to know
Taxpayers who moved during the tax year may need to file more than one state tax return. They will need to find an alternative to Cash App, as the service does not support electronic filing of more than one state statement.
Competition Cash App Taxes
Cash App vs TurboTax
TurboTax has been around for 25 years and gets great reviews for its detailed and thorough maintenance, which guides the taxpayer to all possible deductions, credits and exemptions. It also provides expert assistance if the user has a question about tax rules. But it’s an expensive product, with prices ranging from $59 to $89 for increasingly complex levels of service. Cash App beats it for value to taxpayers with relatively simple filings and a good understanding of their tax situation.
Cash App vs. H&R Block
Known nationally as the neighborhood tax store, H&R Block offers an accessible, free online tax service for those with simple tax filings. There is a MyBlock mobile app which according to several reviewers works best if the user can log in to complete the return and electronic file. Also, if itemized deductions are on the table, the price increases to $50. A consultation with a tax professional, online or in a physical location, raises the fee to $70.
CashApp vs. TaxAct
The TaxAct package is probably Cash App’s closest competitor. It has a free option that will work for the simplest of returns and service levels up to $69, all offering expert live support as well as an accuracy guarantee worth up to $100,000. TaxAct undertakes to reimburse users for any penalties or fees levied by the IRS on returns filed on its platform. Another great feature is the ability to import a previous year’s tax return from another tax service.
How to register
Obtaining the app and an account is required if you wish to try out the Tax Cash App feature. Just download the free app on your mobile, either through an app store or by scanning a QR code on the homepage of the website. Once done, you will need to create an account.
Simply launch the app by tapping its icon. Then enter your phone number or a valid email address. The app sends a numeric code via email or SMS. This verification code is then re-entered into the app, which will also need the debit card information to link the app to your bank account.
The tax function is accessible directly from the home screen of the mobile application. You can also do everything online via the Cash app website.
Cash App provides a convenient and free way to file a personal tax return. With many other features and services available, it will also simplify your financial life by moving your banking to a mobile platform while avoiding the registration, login, password and security hassles of another platform. – fiscal form.
Editorial Note: This content is not provided by Cash App. Any opinions, analyses, criticisms or recommendations expressed in this article are those of the author alone and have not been reviewed, endorsed or otherwise endorsed by Cash App.
This article was republished on April 26, 2022. Information is accurate as of April 8, 2022.