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Hit $5,000 in cashback apps, but the real surprise was the tax hit
I've been stacking grocery and gas cashback apps for 2 years, mostly stuff like Ibotta and Fetch, and last week I finally crossed $5,000 total. That number seemed great until I checked my 1099 from one of them and realized I owe around $800 in taxes on all those 'free' rewards. Is anyone else tracking cashback as taxable income, or did I just miss a huge warning sign?
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joelt701mo ago
My cousin got a $200 Ibotta check last year and thought she was gaming the system until tax time rolled around. She ended up owing like $40 on it and now she keeps a little spreadsheet tracking every app payout, even the $5 ones. Same thing happens with credit card points if you cash them out instead of using them for travel, the IRS counts that as income too. I started doing the same thing she does, just setting aside 15 to 20 percent of every cashback payout so it doesn't bite me later.
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