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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16547
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I have received few money orders below and over $500. 1.

This answer was rated:

I have received few money orders below and over $500.
1. Do I have to report this as an income?
2. Is IRS able to trace me cashing out these money orders?

MyVirtualCPA :

Hello, and welcome to JustAnswer.com

MyVirtualCPA :

Whether or not you owe tax on these money orders depends on the reason you got them

MyVirtualCPA :

If they are gifts, there is no tax

MyVirtualCPA :

If you provided goods or services for the money order, then there is tax - but only to the extent that the money order exceeded your expenses

Customer:

no, i did not provide goods and services

Customer:

can you answer my second question, please

MyVirtualCPA :

And the IRS will not be able to trace you cashing them

Customer:

what's the deal with 500 reporting limit when buying money orders?

MyVirtualCPA :

Purchasing money orders is different than cashing them

Customer:

is there a reporting required for money orders over 500?

MyVirtualCPA :

Not to my knowledge, there is no reporting required for money orders over $500

Customer:

ok thank you

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