Cash Hash » Cash Hash » Cash Advance/ Cash Advances » Square Reader IRS question?

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  #1 (permalink)
: A few questions:

Can I swipe my own card, which would put "cash" into my own account and take that money? If so, do I have yo pay taxes on the amount swiped?

Also, can my friend swipe his card and money goes into my account, and he swipes my card and I get money from him. Do we have to pay taxes on this money?

We are basically just getting our cards swiped to get cash.



Thanks in advance...
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  #2 (permalink)
: jjjhnj
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  #3 (permalink)
: You do not have to pay tax on funds you transfer via your Square, of if someone is loaning you money. You must, however, keep track of the details of the transfers along with the supporting documents.

When a business is audited, the first thing the auditor does is to get the bank statements and add all the deposits. If the deposits are more than the amount reported as sales by the business, the business owner must prove those deposits are not sales. At that time you would need to show where the money came out of your personal credit card through square, and was deposited into the business account. Its the same with all non-sales deposits.

If the business owner cannot provide documentation for such deposits, the auditor will revise all of them to sales. That would result in tax, plus interest and penalties.
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