PayPal question

Does PayPal send out 1099s for us? I thought I heard something about them doing that.

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I could be wrong but I think it's only if the amount you were paid by a single company is over $5,000. I think this next year it's going to be $2,500 then in 2027 it will be $600

Edited 1 time(s). Last edit at 01/16/2025 01:56PM by jpgilham.

1099-Ks should be coming for 5K or more paid for goods and services cumulatively through PayPal, not 5K from a single company.

Edited 1 time(s). Last edit at 01/17/2025 01:22AM by bradkcrew.

I was checking into this today. Yes, Paypal will issue a 1099-K for all our payments, most (or many) of which we will also get 1099s from the MSCs separately. It could be a real pain for our taxes as the payments on Paypal don't separate what is a reimbursement from the fee.

I was under 5k but live in Virginia and got a 1099k. Does anyone know if it's required for taxes this year? I don't think I've made enough from any single company to get a separate 1099.

Did you know, right after Biden took office he was going to require banks to issue 1099's if you deposited $600 or more in a year. Think of the mess that would have caused. They did say they wouldn't use them for tax purposes. I don't believe that.

I think the PayPal 1099-K is to track money you made from sales. I received a 1099-K too, but all of my income from PayPal is from mystery shopping, and I'll get 1099"s from those companies, so at least for now, I'm not going to lose any sleep over it.

I got my 1099-K last night from PayPal. It lists the amount of money I received each month, so I think much of it tracking tax evasion from sales for the IRS, but 95% of my PayPal is large reimbursements, so I hope that doesn't become a trigger for an audit. My actual "earnings" through PayPal are quite low and do get reported.

My taxes are all above board, but handled through an accountant, so I don't relish the idea of an audit I would have to pay an accountant to deal with based on a side effect from MSing.

You were supposed to report all income anyway whether it was 1984 or 2014 or 2024. I really don’t understand the whole “Biden did this” stance. Now, in practical terms, few did such strenuous accounting to where your $8.00 check from a phone call you made got reported. But you were supposed to do it. Getting a 1099 helps you do it. But I do understand the foreboding feeling ‘now' that Big Brother “knows” you got that $8.00 check so to speak. So it feels different.

I think the issue is not that they got a a 1099.

The issue, as I see it, is that PayPal reported non-taxable reimbursement as taxable income. They lumped it into the 1099 with TAXABLE income.

And I always got a 1099 from a MSC if I made over $600 with them in a year.

I received one too. As others have mentioned, I don't put a whole lot of thought into the PayPal 1099-K. It's incoming funds where PayPal is selected for all goods and services transactions. I'm tracking and reporting all income sources, mystery shopping and all other activities.

In the past, there was concern if non-business peer-to-peer payments were also reported, on any peer-to-peer payment platform.

Some states have a 1099-K reporting threshold lower than the federal $5,000 limit for 2024.
$1,000 Threshold - Illinois - New Jersey
$1,500 Threshold - Iowa - Louisiana - Maryland - Massachusetts - Minnesota - Rhode Island - South Carolina - Utah - Vermon - Virginia - Wisconsin
$2,500 Threshold - Arkansas

The IRS is going to be real busy trying to sort what is and isn't actual income reported by Paypal.

I got a huge amount in my 1099K from Paypal and much of it is reimbursement or income that the MSCs will report in separate 1099s. This is going to be a big headache to figure out for my taxes.

I totally disregard the 1099K I get from Paypal. It's junk mail as far as I am concerned. Employers are obligated to provide 1099's. That's what counts. I don't work for Paypal. The usable information is on the 1099 you get from the MSC. If you earn $600 in fees from the MSC, a 1099 must be provided. They should be mailed by the end of January according to IRS rules. Companies who fail to provide it can face stiff penalties.

And just to repeat as it seems some still do not get this...you have to report all the fees you receive from mystery shopping, including the $8 ones and the $2 ones from phone calls or whatever. If all you earned from msc xyz is one $2 phone call you hated and never did again you are still required to report that as income. 2025 is still young so all of you who do not yet have some sort of tracking record for your own uses, now would be a good time to start so that in 2026 when it is time to do your 2025 taxes we will all be ready with our spreadsheet totals. And while you are at it keep track of your miles too as that is a big deduction from those fees.
In addition the IRS allows independent contractors like ourselves to deduct some or all of our medical expenses from our earnings. Check it out on irs.gov for the rules and limitations. I learned about that from this forum and since have been deducting a portion of my monthly fees for my medical care every year. That will cut down on your taxable income from mystery shopping if you have those types of expenses.

The 1099-K does not report taxable income, just payments you got. It will be very easy for the IRS to see you got 1099-NECs, and see that your reported income matches those.

The ones who have to worry are those who do selling, especially online selling. And even those don't have to wrory if they keep records and report their income accurately like most other Americans do..

@mystery2me wrote:

The 1099-K does not report taxable income, just payments you got. It will be very easy for the IRS to see you got 1099-NECs, and see that your reported income matches those.

The ones who have to worry are those who do selling, especially online selling. And even those don't have to wrory if they keep records and report their income accurately like most other Americans do..

So companies that don't send 1099's will be reported on the 1099 k from PayPal

What mystery shopping companies don't send 1099s? Any news that they won't is misinformed. Unless you are talking about amounts under $600. In that case, yes, people won't be able to cheat by not reporting that income.

@mystery2me - Remember who wrote that, loophole-lookin' John.

@johnb974 wrote:

@mystery2me wrote:

The 1099-K does not report taxable income, just payments you got. It will be very easy for the IRS to see you got 1099-NECs, and see that your reported income matches those.

The ones who have to worry are those who do selling, especially online selling. And even those don't have to wrory if they keep records and report their income accurately like most other Americans do..

So companies that don't send 1099's will be reported on the 1099 k from PayPal

Yes. I did maybe $60 for a couple of companies, who happened to pay me by PayPal.

@purpleicee wrote:

@mystery2me - Remember who wrote that, loophole-lookin' John.

What loophole?

Now if you have a choice between Paypal and your bank account, use your bank account. No 1099-K

Edited 1 time(s). Last edit at 01/31/2025 06:08AM by johnb974.

Except that very few companies offer the direct deposit option.

@johnb974 wrote:

Did you know, right after Biden took office he was going to require banks to issue 1099's if you deposited $600 or more in a year. Think of the mess that would have caused. They did say they wouldn't use them for tax purposes. I don't believe that.

John I never heard of this at all. Are you sure it was about depositing money and not about the interest? They do send 1099's for bank interest. Not sure what the minimum is but if it is only a few cents you dont get one. Depositing money is not a taxable event but earning interest is so that makes more sense.

@sandyf wrote:

@johnb974 wrote:

Did you know, right after Biden took office he was going to require banks to issue 1099's if you deposited $600 or more in a year. Think of the mess that would have caused. They did say they wouldn't use them for tax purposes. I don't believe that.

John I never heard of this at all. Are you sure it was about depositing money and not about the interest? They do send 1099's for bank interest. Not sure what the minimum is but if it is only a few cents you dont get one. Depositing money is not a taxable event but earning interest is so that makes more sense.

Here is an article on it.

Banks balk at IRS taxpayer reporting proposal
American Families Plan would require deposit, withdrawal information on annual 1099 form

October 8, 2021

[www.capegazette.com]

It is rather long, but, according to Snopes, they refer to the reports as a "Mixture" of Truth and Hyperbole.

Read their assessment here:

[www.snopes.com]

@Belle wrote:

And just to repeat as it seems some still do not get this...you have to report all the fees you receive from mystery shopping, including the $8 ones and the $2 ones from phone calls or whatever. If all you earned from msc xyz is one $2 phone call you hated and never did again you are still required to report that as income. 2025 is still young so all of you who do not yet have some sort of tracking record for your own uses, now would be a good time to start so that in 2026 when it is time to do your 2025 taxes we will all be ready with our spreadsheet totals. And while you are at it keep track of your miles too as that is a big deduction from those fees.
In addition the IRS allows independent contractors like ourselves to deduct some or all of our medical expenses from our earnings. Check it out on irs.gov for the rules and limitations. I learned about that from this forum and since have been deducting a portion of my monthly fees for my medical care every year. That will cut down on your taxable income from mystery shopping if you have those types of expenses.

If you found $20 on the streer would you report it as incomes?

The website that John posted is a rightwing media misinformation site. There are no credible sources posted for the lies they are spewing. Check the sources of the website's information, EVERY time.

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