Square—the financial services firm launched by Twitter founder Jack Dorsey—has acquired the tax filing service of personal finance firm Credit Karma.
According to a Nov. 25 announcement, Square paid $50 million for Credit Karma’s tax filing service to integrate it into Cash App, its crypto-enabled mobile payments service. The sale came after the U.S. Department of Justice required Intuit to sell off Credit Karma Tax before acquiring the company.
Noting that Square “created Cash App to provide more access to the masses of people left out of the financial system,” Cash App lead Brian Grassadonia said:
“We’re thrilled to bring this easy-to-use tax product to customers as we continue to build out the suite of tools Cash App offers. With this acquisition, we believe Cash App will be able to ease customers’ burden of preparing taxes every year.”
The Credit Karma Tax service provides do-it-yourself tax filing tools for United States-based consumers. It joins Cash App’s peer-to-peer payments, Cash Card, and direct deposit, as well as fractional investing in traditional stocks and Bitcoin services.
CreditKarma director of engineering Patrick Fink explained that an increasing number of United States residents are starting to file their taxes themselves, which is what such tools are expected to help with.
It comes at an opportune time, as U.S. crypto investors have been receiving outlandish tax bills in the past few days, reportedly after the IRS interpreted lists of customers’ trades it received from exchanges including Coinbase as statements of gross income—leading one client of CryptoTrader.tax to receive a $127,000 tax bill based on bitcoin trades that amounted to a $2,000 loss last year.
Cash App’s BTC bet is paying off
Cash App also heavily invested in developing its Bitcoin services. About two years ago, the application deeply integrated the oldest cryptocurrency and started allowing people to send the BTC to other users.
As Modern Consensus reported in late May, Cash App is pushing its users to buy Bitcoin in increasingly aggressive ways, even featuring an automatic periodically recurring investment feature. This bet apparently paid off, as data released earlier this month revealed that “Cash App generated $1.63 Billion of bitcoin revenue and $32 million of [gross profit]” in Q3 2020.
Furthermore, Square seems rather convinced that betting on Bitcoin is a good idea, given that the company invested $50 million in the crypto asset in early October. That’s worth $90 million at press time.