Cash App Taxes Review: Free and Convenient Filing (2024)

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Cash App Taxes Overview

The complex and time-consuming drudgery of yearly tax filing got a little easier with the coming of the internet and electronic filing. The Internal Revenue Service began accepting e-filed tax returns in 1986, when 25,000 returns were uploaded by five tax preparation services. During the 2022 filing season, the IRS processed 151 million e-filed returns from taxpayers looking 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 (now Block), acquired and rebranded the tax service provided by Credit Karma. The service’s name changed from Credit Karma Tax to Cash App Taxes in October 2021.

Key Features

GOBankingRates measured four essential attributes of tax e-filing services — cost, simplicity, security and accuracy — and came up with a rating placing Cash App Taxes among the leaders in this personal finance category.

Cost

No taxpayer wants the e-filing process to add to the financial burden of paying taxes. Although many authorized e-file providers claim to offer a free-of-charge experience, many upsell their services in the case of more complicated returns. Cash App Taxes stands apart for charging no fees for additional schedules or higher levels of service.

Cash App does not charge upgrades for:

• Itemized deductions listed on Schedule A
• Investment income listed on Schedule B
• Self-employment income listed on Schedule C

Competing services also may charge for e-filing of state returns, while Cash App allows one free state return. As of January 2023, Cash App supports state returns for 40 states and Washington, D.C., but it only supports joint returns for married taxpayers in community property states. Users must file federal returns in order to get state returns filed.

Simplicity

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 filing from a button on the app and website home screen. The app guides users through a series of basic questions about their employment, income and expenses. Users respond by clicking on buttons or entering figures.

The app then creates a series of IRS forms with the appropriate numbers filled in. Users may review the forms on the screen or download them as PDF files. The app displays the resulting balance owed or refund amount before uploading the forms directly to the IRS.

Also making the process easy for former Credit Karma Tax users, Cash App allows access to previous returns.

Security

A major concern when doing any sort of personal financial business on the internet is security. Tax returns, of course, are chock full of data useful to hackers, including Social Security numbers, addresses, phone numbers, employment information and a myriad of financial details. E-filers need to make sure all of that information is kept confidential.

The first step is to locate an e-file provider authorized by the IRS. The agency provides a convenient tool that allows taxpayers to search these providers by the taxpayers’ ZIP codes. In larger urban areas, the list will run to dozens of accounting, tax and other financial firms.

The IRS sets detailed security standards for these authorized providers, one of which is 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 requires two-factor authentication every time a user logs in.

Accuracy

The accuracy of any tax return is a big concern of taxpayers, who know that even experienced tax pros sometimes have trouble navigating and understanding the federal tax code. A mistake on a return can be aggravating, especially if the mistake results in a higher tax bill or smaller refund.

Cash App Taxes claims to guarantee 100% accuracy. The Accurate Calculations Guarantee will reimburse you up to $1,000, in the form of a gift card, if you incur penalties or interest due to a Cash App Taxes calculation error.

Cash App Taxes also offers a Maximum Refund Guarantee. If you use another service to amend a return prepared with Cash App Taxes, and the amended return results in a larger refund, Cash App will refund a minimum of $25 and a maximum of $100 in the form of a gift card.This guarantee applies only to 2022 tax returns filed in 2023.

Cash App Taxes does provide a free consultation in the case of an IRS audit of a tax return filed through the app.

Who Cash App Taxes Is Best For

Performance in the four important categories listed above earns Cash App a 4.9-star rating for those with simple and straightforward tax situations. Some taxpayers may need a more robust e-filing service, as Cash App Taxes doesn’t support the foreign tax credit, K-1 forms for those with income from a trust or partnership, or foreign earned income of more than $600. Cash App Taxes also doesn’t provide tax experts for consultation.

Users can expect a free, simple and secure experience on Cash App while also taking advantage of faster refunds than is possible through mailed returns. Although Cash App can’t guarantee when the IRS will complete the process, the service draws on 2020 data to claim an improvement of up to five days over traditional banks between filing and receipt of the refund in your Cash App account.

Cash App Taxes does require that tax users download and sign up for the app. It works best for those experienced with doing their own taxes, as the e-filing feature lacks phone customer assistance. With those caveats, Cash App is now providing one of the best e-filing services available.

Good To Know

Taxpayers who moved during the tax year may need to file more than one state tax return. In such situations, they’ll need to find an alternative to Cash App Taxes, as the service does not support e-filing of more than one state return.

Comparable Options

Here’s a look at alternatives you might consider to help you decide whether Cash App Taxes is right for you.

TurboTax

TurboTax has been around for over 25 years and earns good reviews for its detailed and thorough walk-through interview, which guides the taxpayer to all possible deductions, credits and exemptions. It also provides expert assistance should the user have a question on tax rules. It’s free for taxpayers filing the most basic returns, but for everyone else prices range from $59 to $119, depending on the complexity of your return. Cash App Taxes beats it for value for taxpayers with relatively straightforward returns and a good knowledge of their tax situation.

H&R Block

Familiar nationwide as the neighborhood tax shop, offers an online tax service that is accessible and free for those with simple tax returns. For more complicated situations, such as itemized deductions, investments, rental income or self-employment, prices range from $55 to $110. A consultation with a tax professional, either online or at a physical location, bumps the charge to a minimum of $80.

If you decide to go it alone, there’s a MyBlock mobile app that, according to several reviewers, works best if the user can get online to complete the return and e-file.

TaxAct

The TaxAct package is probably Cash App’s closest competitor. It has a free option that will work for the simplest returns, and service levels priced up to $64.95, with all offering live expert assistance as well as an accuracy guarantee worth up to $100,000. TaxAct promises to reimburse users for any penalties or interest levied by the IRS on returns filed with its platform if the penalties or interest resulted from an error in TaxAct’s software.

How To Get Started With Cash App Taxes

Getting the app and an account is necessary if you want to try Cash App Taxes. It’s a simple matter of downloading Cash App to your mobile device, either through the App Store or Google Play or by scanning a QR code on the website’s homepage. Once that’s done, you’ll need to sign up for an account.

Simply launch the app by tapping on its icon. Then enter your phone number or a valid e-mail address. The app sends a numeric code by email or text. This verification code is then entered back into the app, which also will need debit card information to link the app to your bank account.

The tax feature can be accessed directly from the home screen on the mobile app. You also can get everything done online through the Cash App website.

Final Take

Cash App Taxes provides a convenient and no-cost way to file a personal tax return. With plenty of other features and services available, Cash App can also simplify your financial life by moving your banking to a mobile platform while avoiding yet another tax platform’s sign-up, login, password and security worries.

Daria Uhlig contributed to the reporting for this article.

Information is accurate as of Jan. 6, 2023.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.