Square does not currently report to the IRS on behalf of their sellers.
Tax law requires that they provide users who process over $20,000 and 200 payments with a 1099K before January 31st, 2012.
They are also required to file a corresponding tax form with the IRS.
Does Square take taxes?
Square’s fees are taken out of the total amount of each transaction, including tax and tip. To track your taxable and non-taxable sales, visit your online Square Dashboard.
Does PayPal report to the IRS?
Tax information reporting for online sellers
PayPal is required to report gross payments received for sellers who receive over $20,000 in gross payment volume AND over 200 separate payments in a calendar year.
Can Square be used for personal use?
It is perfectly acceptable to use Square for personal business, such as a yard sale. You do not need to have a registered business to take advantage of Square and the ability to accept credit cards. For every payment processed through Square, you must provide a legitimate good or service.