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1099-K Form From Paypal?

Discussion in 'Off Topic [BG]' started by PolkaHero, Jan 29, 2018.

  1. PolkaHero


    Jan 5, 2002
    I didn't expect to receive a 1099-K form from Paypal today, seems like I sold more than $20k in music gear last year and this is the threshold for triggering this tax form. Just wondering if anyone on here has sold that much gear and how they handled it? PM me if you want, thanks.
  2. OldDog52

    OldDog52 Gold Supporting Member

    Jan 1, 2011
    Ack. I don’t like the sound of that. Do you have a PayPal business account? Presumably they would have your SSAN.
  3. PolkaHero


    Jan 5, 2002
    No business account.
  4. Stumbo

    Stumbo Wherever you go, there you are. Supporting Member Commercial User

    Feb 11, 2008
    the Cali Intergalctic Mind Space
    Song Surgeon slow downer software- full 4 hour demo
    Form 1099-K is used to report income received from income received from electronic payments such as credit cards, debit cards, PayPal, and other third party payers. In most cases, the payment settlement entity (PSE) will send you a 1099-K by January 31. Be sure to add the income you report on your 1099-K to your total business income when you file your taxes.

    Assess the number of transactions and the gross payments received. If you conducted 200 or more transactions with one or more PSEs that garnered a total income of $20,000 or more, you should receive a 1099-K form in the mail with these totals reflected on the form. If you conducted fewer than 200 transactions or the total came to less than $20,000, you do not need a 1099-K form.[2]
    Sometimes companies send out 1099-K forms even when the recipient may not be required to use them. It's a good idea to manually add up the number of transactions conducted with PSEs to determine whether you need to fill out the form.[3]
    Not everyone who accepts credit card or third-party payments has over 200 transactions during a given tax period. For example, if you're self-employed and only received 30 credit card payments last year, you won't need a 1099-K. If your business does not accept credit cards or other forms of electronic payment, you should not receive this form.
    The gross amount of a reportable payment does not include any adjustments for credits, cash equivalents, discount amounts, fees, or refunded amounts.
    fdeck and buldog5151bass like this.
  5. fdeck

    fdeck Supporting Member Commercial User

    Mar 20, 2004
    Madison WI
    HPF Technology LLC
    I'm not an accountant, but in my view, a 1099 is nothing to fear. It doesn't change how much you earned, or how much tax you have to pay. It's just a record of information that's been reported to the IRS, but it's the same information that you already have. In some cases you have to attach copies of your 1099's to your returns.
    Stumbo likes this.
  6. Rev. Cornelius

    Rev. Cornelius Supporting Member

    Jan 30, 2007
    Boston, MA
    I received one yesterday. I sold 1 item in the past year for a total of 725.00.

    I don't know why I received it. I will have to call and find out.

  7. jdthebassman


    Jul 11, 2010
    this is one of the many reasons I don't use pay pal for selling
  8. PolkaHero


    Jan 5, 2002
    What do you use?
  9. buldog5151bass

    buldog5151bass Kibble, milkbones, and P Basses. And redheads.

    Oct 22, 2003
    In general, businesses will issue a 1099 to anyone they paid over$600.
  10. jdthebassman


    Jul 11, 2010
    I go with money orders cashiers checks from the bank. I know its old fashion but it helps me fly under the radar. also cash for local sales
  11. PolkaHero


    Jan 5, 2002
    I wouldn't sell much if I just accepted money orders and cashier checks, lol. Takes a lot of trust on the buyer's part!
  12. jdthebassman


    Jul 11, 2010
    I understand, it works for me on ebay with my feed back rating. the other reasons is pay pal always takes the side of the buyer and tacks on fees as well.

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