Do I need to file taxes for cash app investments?

Unsolved
1

Here’s my situation… I’m 18, and back in June 2024, I put $20 into stocks on Cash App just to see what would happen. I split it evenly—$10 in BTC and $10 in Nvidia. As of now, BTC earned me 14 cents, and Nvidia got me $1.14.

Today, I got an email saying I might need to file taxes because of these transactions. Do I actually need to file taxes, or is this not something to worry about since it’s such a small amount? I also read somewhere about a $400 threshold, but I’m not sure if it applies here.

2

Looks like you’re in the 0% capital gains bracket, so even if you filed taxes, you wouldn’t owe anything.

3

If your only income is $1 (which gets rounded when filing), you don’t need to file taxes.

4

Barrett said:
If your only income is $1 (which gets rounded when filing), you don’t need to file taxes.

The issue sometimes is that if you don’t file a Schedule D, the IRS won’t have your cost basis. For example, if you invest $100,000 and sell it for $100,001, you need to file a Schedule D to show your gain was only $1, or the IRS might tax you on the full $100,001.

For $20, though, you’re fine.

5

@Tan
Thanks for explaining! I was definitely overthinking it.

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@Tan
Since these were 2024 transactions, Cash App is required to report your cost basis to the IRS. You’re good.

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Barrett said:
@Tan
Since these were 2024 transactions, Cash App is required to report your cost basis to the IRS. You’re good.

So I don’t need to worry about it? I’m totally clueless about taxes.

8

@Pippin
Yeah, you’re fine. A lot of tax discussions here go into deep details, but with $1 of income, you won’t need to file. Even if you’re claimed as a dependent, the threshold for filing taxes on unearned income is $1,300 for 2024. You’re way below that.

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Barrett said:
If your only income is $1 (which gets rounded when filing), you don’t need to file taxes.

Thanks for clearing that up. I totally forgot about this until I got the email.

10

The $400 threshold only applies to self-employment income, not investment income. Did you have any other income in 2024, like wages or scholarships? Also, can someone else claim you as a dependent?

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Kenan said:
The $400 threshold only applies to self-employment income, not investment income. Did you have any other income in 2024, like wages or scholarships? Also, can someone else claim you as a dependent?

No, this was my only income. My main focus has been school, and my parents are supporting me while I transition to college and a job in another state.

12

What $400 threshold are you talking about?

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Franklin said:
What $400 threshold are you talking about?

I read somewhere that if your income on Cash App is under $400, you don’t need to file, but I’m not sure if that’s true.

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Pippin said:

Franklin said:
What $400 threshold are you talking about?

I read somewhere that if your income on Cash App is under $400, you don’t need to file, but I’m not sure if that’s true.

Apparently, the $400 threshold only applies to self-employment income, as someone else pointed out.

15

@Pippin
That’s right. If you have no other income and this is your only unearned income, you don’t need to file. You can file if you want, though—it’s a good way to learn how taxes work and also prevents someone else from filing under your name.

16

@Reagan
Good to know. Thanks for the advice.

17

Just to clarify—did you actually sell the investments? Taxes only apply when you sell.

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Griffin said:
Just to clarify—did you actually sell the investments? Taxes only apply when you sell.

Yes, I did sell them.

19

I’m in a similar situation! Made a couple of bucks on Cash App stocks and wondering if I need to file.

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Afton said:
I’m in a similar situation! Made a couple of bucks on Cash App stocks and wondering if I need to file.

From what I understand, if it’s a tiny amount and your only income, you don’t need to file. It might be different for you, though.