Individuals who have received over $10,000 in cash payments must understand how to report this income and which forms are necessary.
To ensure that you are reporting and filing your income correctly, consider the following filing requirements as described by the IRS:
- What is Form 8300 and who must use it? Form 8300 is used to report cash payments of more than $10,000. You must use Form 8300 if you have received over $10,000 in cash payments (either lump sum or series of payments) while conducting trade or business.
- What cash payments are reported? Any cash payments received while doing business which exceed $10,000 must be reported. If you receive a series of payments from the same client which exceeds $10,000 it must be reported on Form 8300. As long as the payment(s) exceed $10,000, are from the same client and paid in a 12 month period, they must be reported on Form 8300.
- Transactions and related transaction definition. A transaction is describes as the event which results in the transfer of cash; loan repayment, sale of goods, rentals, etc. A related transaction occurs within a 24 hour period (in a series of transactions).
- What are cash transactions? For the purpose of tax filing, the IRS considers cash transactions anything which involves cash, coin, cashier’s check, bank draft, traveler’s check or money order that has a face value of $10,000 – which includes US and foreign currency.
- What are designated reporting transactions? The retail sale of cars, boats, property, collectibles or items of travel and entertainment with a sales price of over $10,000.
- Do personal checks fall under the definition of “cash”? Personal checks are not consider cash for Form 8300 reporting.
- When must Form 8300 be filed? Form 8300 is not filed annually with your other tax items. Businesses must file Form 8300 each time they are in receipt of $10,000 or more in cash payments. If the $10,000 is reached after a series of payments, the file is formed once the payments exceed $10,000 (within 15 days). This pattern continues throughout the year if more forms are filed. Each time the eligible cash payments exceed the $10,000 threshold, Form 8300 must be filed within 15 days.
- TIN and Form 8300. If a business is unable to obtain the Tax Identification Number of the customer making cash payments, Form 8300 should still be filed as directed including a statement explaining the circumstances surrounding the missing TIN number.
- Help with Form 8300. Publication 1544 helps businesses understand how, why, when and where to file Form 8300. In addition, Publication 1544 describes key terms and provides explanations and instructions for filing out the form.
- Where to get Form 8300. Download from IRS website or call 1-800-829-3676.
- Where to send Form 8300. Internal Revenue Service, Detroit Computing Center, PO Box 32621, Detroit, MI 48232.
If filers have any questions regarding Form 8300, they can contact the IRS via email at 8300QUESTIONS@IRS.GOV.
