(DEAD) Swagbucks Adds Option To Cashout With $25 Bank Deposit

Important update 5/24/23: a reader notes that this Swagbucks bank cashout option is routed via a third party service provider called Dots. This is relevant for 1099 purposes as this provider might not get information on what was earned via Buy SB which does not require a tax form and what was earned from things like referrals which do require. Basically, there is a good chance they’ll be sending out a form 1099 if you redeem more than $600 via Dots, regardless of how you earned the Swagbucks. This is similar to how it works with Paypal and is a correction from what we wrote in the article below. Dots will ask you for your SSN/DOB when you hit the $600 threshold which seems to indicate that they plan on 1099ing for this.

Original Post 4/30/23:

Swagbucks has added a Bank Deposit option whereby you purchase a $25 Bank Deposit ‘gift card’. The gift card comes to your email where you can add bank instructions to send the $25 to your bank or brokerage.

Swagbucks $25 Bank Deposit link

Swagbucks always offers a Paypal option with various denominations. The new option can be useful for someone who doesn’t use Paypal. Also, Paypal always counts received payments from Swagbucks toward your 1099-K threshold since they can’t tell which money is taxable. On the other hand, when you redeem for a gift card, Swagbucks doesn’t count non-taxable things, such as when you Buy Swagbucks. This new Bank Deposit gift card is a new option for someone who prefers cold hard cash and doesn’t want to hassle with an unwarranted 1099-k tax form.

It’s a bit of a pain that Swagbucks doesn’t have an option to save a bank directly and that they only allow $25 Bank Deposit gift cards. In any case, an interesting new option here.

Hat tip to Kris

If you’re new to Swagbucks then please read our review. You can also get a bonus of up to $13 by using a referral link.

Subscribe
Notify of
guest

127 Comments
newest
oldest most voted

Sunshine
Sunshine (@guest_1636009)
June 16, 2023 22:17

I was looking for this option to cashout to bank.. now I see something called “Payoneer” anyone use this before? It says redeem SB to Payoneer and then Payoneer to bank account but no idea how it works.

007
007 (@guest_1662644)
July 30, 2023 13:08

I think there are significant fees involved when I researched this on Reddit

Eric
Eric (@guest_1662670)
July 30, 2023 14:00

Yes, I used Payoneer several years ago. I was awarded a prepaid debit card from some website. I think that 007 is correct that there were fees for everything.

Komma
Komma (@guest_1629462)
June 5, 2023 21:48

 Chuck  William Charles This payment method is now missing for the last couple of days.

007
007 (@guest_1633814)
June 13, 2023 15:31

Concur seems gone

Zenster
Zenster (@guest_1626045)
May 30, 2023 11:15

I wonder if the Paypal credit card that gives cash back still counts towards the amount or is this only for money coming into Paypal? I’m assuming it’s the later and if you get cash back through Paypal directly, you’re good.

Zenster
Zenster (@guest_1625889)
May 30, 2023 02:54

We need an article on how to deal with proving non taxable stuff is non taxable if it comes to it.

Jay
Jay (@guest_1662604)
July 30, 2023 11:14

I know this is old, but basically keep records. If it’s cashback on a purchase, have the receipts and offer terms. If it’s discover incentives for an app signup or bank deposit, then it’s probably just income.

1099-k doesn’t inherently mean it’s all taxable. It just means you need to address it. Of course if you have a massive delta of the 1099 and what’s reported income that may be a flag for the IRS.

Zenster
Zenster (@guest_1625883)
May 30, 2023 02:29

What does the line through PayPal mean? That its not true that PayPal will always count money as taxes? What was the point of me doing SB? I don’t do stuff that is taxed. Think I have one $30 game I did. I did cash back rebates. This should be excluded. Yet PayPal counts it? What gives? I was shocked to receive notification to submit SSN when most I got is non taxable rebates cash back from items bought which the IRS don’t consider taxable?

And SB/Dots would count it if I did it through bank deposit? What is the point of rebates cash back not being considered tax when it will ne anyway?

What does one do?

jd
jd (@guest_1626030)
May 30, 2023 10:57

do you have any citi credit cards? if so redeem for the mastercard gc and pay your bill with them

rocky_nnc
rocky_nnc (@guest_1623809)
May 25, 2023 14:23

Paypal never sent me 1099 although i do a lot of rebates every year.

Zenster
Zenster (@guest_1625890)
May 30, 2023 02:56

Well I have one 2 promos for signing up 1 game and that’s it. But tons of rebates. So I don’t know anymore with PayPal. Thank Hof Rakuten send paper checks.

More points may not be worth it if it gives me headache. I don’t have this with Chase portal etc.

007
007 (@guest_1625891)
May 30, 2023 03:03

2022 irs deferred $600 1099-k limit for another year

007
007 (@guest_1623366)
May 24, 2023 20:27

Fwiw, doesn’t seem so horrible to file taxes with form 1099-k if no profit, but certainly not as good as not getting one (and then why not use PayPal since greater redemption amounts). Anyhow will stop soon so 1099-k doesn’t exceed $600 dramatically.

https://www.irs.gov/businesses/understanding-your-form-1099-k

See “ What should I do if I received a 1099-K in error or for a personal item I sold?” and “Personal items sold at a loss” which is analogous to the buy sb scenario.

Bob
Bob (@guest_1623363)
May 24, 2023 20:14

Isn’t it easier to just get the monthly discounted $25 gift card for somewhere like Walmart, where I assume everyone shops (or you could find something you want if you don’t regularly go there)?

$3 profit and no IRS poking around.

ctj
ctj (@guest_1623302)
May 24, 2023 17:31

maybe i’m missing something, but why would anyone expect the vendor who handles gift cards to know or care that you acquired your swagbucks through purchases or other means? prodege is just buying a $25 bank deposit on your behalf. the manner in which you convinced prodege to make that purchase shouldn’t matter to dots.

regarding the $600 1099 threshold, i thought they got rid of the threshold and now report everything. or is that just paypal?

Otto
Otto (@guest_1623341)
May 24, 2023 19:09

ctj It’s not about whether Dots care, it’s about YOU caring. For example, Buy SB is not considered taxable by Swagbucks. If you redeem >$600 in gift cards from Swagbucks using points that were obtained via Buy SB, it does not generate the 1099-K since Swagbucks knows those points were purchased and not considered income. But if you cash out through third party (Paypal or Dots), the third party does not know this, so everything is assumed to be taxable and reported on 1099-K. Now the onus is pushed onto you, the taxpayer, to file it correctly, otherwise you will be taxed on your entire 1099-K when in reality most it should be washed out via what you spent to purchase the points. Not impossible to deal with, but certainly an annoyance.

For you second question, I think you have things mixed up. The threshold used to be $20,000, but then got lowered to $600. But since there was so much panic last year, they changed it back to $20,000 for 2022. 2023 is back to $600. You might be confusing 1099-INT where the $600 threshold got lowered to $10. That is unrelated to 1099-K.

Zenster
Zenster (@guest_1625884)
May 30, 2023 02:37

Otto

I’m new to this. This is such bullshit. I only do non taxable things like cash back for buying items that fall under rebates to the IRS. But PayPal doesn’t recognize it. SB and dots doesn’t either.

How does one go about proving it to the IRS for idiot companies that don’t do their job? It makes me not want to do it due to being a pain in the ass. I don’t have to do this with straight bank points. I guess Rakuten allows checks for rebates to be mailed. Which sucks but I rather do that.

I did not plan to have to prove all (most) of what I done is just cash back rebates etc. What does one have to do exactly?

007
007 (@guest_1623367)
May 24, 2023 20:29

Threshold of $600 across nation is what is new, was only for certain states previously: https://www.irs.gov/businesses/understanding-your-form-1099-k

Initially seemed that Swagbucks was doing deposits directly from their description, but I guess should have realized would get 1099-k once involvement of dots.dev became apparent

007
007 (@guest_1622785)
May 23, 2023 20:05

Just received form asking for SSN and DOB etc for 1099K or 1099-NEC for dots.dev. Looks like they likely DO issue the forms like PayPal even for buy SB transactions. Not a game changer like I thought.

007
007 (@guest_1622804)
May 23, 2023 20:48

 Chuck  William Charles You may want to update the post with this unwelcome news. I hope they don’t issue a 1099-NEC instead of 1099K, that would likely be a mess to fix. All buy sb transactions btw. Thanks!

007
007 (@guest_1622847)
May 23, 2023 22:11

Ok, I hope so. It does seem like a third party company dots.dev that does the cash out process, so not sure if there is anything in writing from THEM that states they won’t issue one. I hope you are right, though.

007
007 (@guest_1622890)
May 23, 2023 23:09

Yes, seems to be case unfortunately. They are ones that asked for the info not Swagbucks. Emails come from [email protected] to redeem funds if Swagbucks doesn’t have your phone number. Texts from 844-991-3687. They do have a website https://dots.dev/ and chat support with which I will inquire more also (but I am skeptical that their responses will necessarily reflect reality). It does seem like this company is more merchant oriented (ie Swagbucks is a customer) rather than PayPal (I or my data is the customer), but the clear ask at $600 with links to irs info about forms 1099-NEC and 1099-K makes me suspicious. End user portal seems to be https://my.dots.dev for those who have received payouts.

007
007 (@guest_1623267)
May 24, 2023 16:17

Thanks!

007
007 (@guest_1623333)
May 24, 2023 18:46

Btw, their chat customer service confirmed will issue 1099-K

007
007 (@guest_1622891)
May 23, 2023 23:10

Made a longer reply with more info re said company but seems to have gone to moderation.

Sam
Sam (@guest_1622821)
May 23, 2023 21:15

Did you reach a certain # cashed out through them? Wondering if they want it early before 600 etc.

007
007 (@guest_1622848)
May 23, 2023 22:12

Sam Just checked, and looks like this withdrawal (for which they asked for SSN and DOB) makes exactly $600. I sort of expected Swagbucks to ask me, but once the dots.dev link is sent, I am not aware of any way not to cash out and still get the SB back. Perhaps it happens automatically after a while, I do not know.

Otto
Otto (@guest_1623235)
May 24, 2023 15:15

What happens if you just ignore their request? SB will prompt for SSN when you pass the threshhold but you can just defer until next calendar year to reset it. Your money/points are stuck until next year but I dislike handing over SSN unnecessarily. I wonder if Dots would do the same and let you cash out next year if you just ignore the SSN request for this year.

007
007 (@guest_1623265)
May 24, 2023 16:09

I don’t know. I was worried the $25 would go missing or be a pain to get back as it was already redeemed from SB. But maybe it would have made sense to reach out first.

anthonyjh21
anthonyjh21 (@guest_1624558)
May 26, 2023 19:28

007 any updates?

I ran into this issue and I currently have four $25 in que that require me to fill out the form for tax purposes. I did the math and I’m currently at $575 accepted thus far.

I sent them a chat and email request with no reply (two business days).

Initially I had the wrong phone number linked to my Swagbucks account and they (Swagbucks) were able to reverse two $25 w/d so I’m hoping the same can be done here.

007
007 (@guest_1624572)
May 26, 2023 20:17

So I entered info already before I posted so it was too late for me. If you are just over $600 I don’t think the filing for 1099-k will be too onerous or really invite much scrutiny imho at least for my tax return . See my comment https://www.doctorofcredit.com/swagbucks-adds-option-to-cashout-with-25-bank-deposit/#comment-1623366

anthonyjh21
anthonyjh21 (@guest_1624579)
May 26, 2023 20:31

Per your comment it seems we’d need to have offsetting entries. I’m going to push for getting my unaccepted bank deposits reversed but worst case I have one more thing to deal with come tax time.

“If you receive a Form 1099-K for a personal item sold at a loss, report the information on Form 1040, Schedule 1, Additional Income and Adjustments to Income with offsetting transactions. For example, if you receive a Form 1099-K for selling your couch online for $700 you will report:

Part I – Line 8z – Other Income – Form 1099-K Personal Item Sold at a Loss $700
Part II – Line 24z – Other Adjustments – Form 1099-K Personal Item Sold at a Loss $700
The net effect of these two adjustments on adjusted gross income would be $0.”

007
007 (@guest_1624580)
May 26, 2023 20:34

It is talking about what YOU report on Form 1040, Schedule 1, NOT what is on your. 1099-K. No offsetting entries needed there per your quote.

007
007 (@guest_1624596)
May 26, 2023 22:03

Fwiw, I do agree this is an unfortunate development and certainly if it is easy to undo the redemptions and get money back, that might be a worthwhile option. With that said, the reporting seems straightforward and taxable income should be $0. I’m certainly not going to do thousands planned, but for $600 or slightly over I think it won’t make a big difference – lesson learned