How will the IRS sort out the differences between a 1099K and 1099NEC?

@Sonicshopper wrote:

If a shopper is paid $600 or more from an MSC, then that MSC is required to send you a 1099NEC.

I have multiple entities (one being my own CPA) telling me this is not the case if you were paid through PayPal and received a 1099-K, it apparently alleviates the requirement of the MSC to supply a 1099-NEC. It also alleviates confusion of receiving a 1099-K and 1099-NEC for the same income.

Many companies seem to be handling this differently right now, but I am seeing a trend toward including reimbursements. As we move closer to the potential for a 1099-K trigger level being $600, I can only see that increasing.

For people like me who shop mainly for large reimbursements, this unquestionably draws more attention to the MS income. Start looking at compensation-in-kind rulings in other situations and there's a decent argument for making the reimbursements taxable, as the OP has suggested.

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More About Mystery Shopping Taxes

@SteveSoCal wrote:

@Sonicshopper wrote:

If a shopper is paid $600 or more from an MSC, then that MSC is required to send you a 1099NEC.

I have multiple entities (one being my own CPA) telling me this is not the case if you were paid through PayPal and received a 1099-K, it apparently alleviates the requirement of the MSC to supply a 1099-NEC. It also alleviates confusion of receiving a 1099-K and 1099-NEC for the same income.

Many companies seem to be handling this differently right now, but I am seeing a trend toward including reimbursements. As we move closer to the potential for a 1099-K trigger level being $600, I can only see that increasing.

For people like me who shop mainly for large reimbursements, this unquestionably draws more attention to the MS income. Start looking at compensation-in-kind rulings in other situations and there's a decent argument for making the reimbursements taxable, as the OP has suggested.

Steve,
I received the 1099K from PayPal AND the 1099NEC's from PRESTO and IPSOS. They are the only companies that pay me through PayPal.
My 1099K from PayPal includes fees and reimbursements from those 2 MSC's.
I did over $600 of work for each MSC.

Edited 1 time(s). Last edit at 02/26/2025 06:34PM by Sonicshopper.

Does anyone know if the shops are through sassie but completed on the Pesto App which 1099 will they appear on? I have one each from Presto Live shopper and Ipsos(sassie). I'm going to try and keep better track in the future.

Is the threshold for getting a 1099 $600 or $2500 for 2025? I know some states have lower thresholds, but not asking about that. I know for eBay it was $5000 for 2024 and $2500 for 2025.

@Sonicshopper wrote:

I received the 1099K from PayPal AND the 1099NEC's from PRESTO and IPSOS. They are the only companies that pay me through PayPal.
My 1099K from PayPal includes fees and reimbursements from those 2 MSC's.
I did over $600 of work for each MSC.

As I mentioned, looks like many are handling it in different ways. I have over $600 in earnings from Coyle, and received only the 1099-K.

I specifically reached out to the Coyle accounting department and they confirmed they will not be supplying a 1099-NEC, since it was not required if I received a 1099-K.

I just wanted to clear up the confusion about the 1099-NEC being REQUIRED. It seems it's optional at the most, but also seems like your income may be doubly reported, so it might be advisable to claim the 1099-K income and then deduct it out with an explanation.

We know that the IRS will see the 1099-K income. We also know they have no way to connect it to your 1099-NEC unless you report it and explain that. To me, unreported income feels like a bigger flag than a high rate of deductions from reported income.

Either way, it seems like these new policies are giving the IRS a closer look at how the MS industry operates, which I don't see as a good thing. It's one step closer to having the reimbursements taxed, which will stop me from performing the majority of shops I that I current do.

@nellybean212 wrote:

Does anyone know if the shops are through sassie but completed on the Pesto App which 1099 will they appear on? I have one each from Presto Live shopper and Ipsos(sassie). I'm going to try and keep better track in the future.

Nelly,
If the shop was picked up off Sassie, but you did it through the PRESTO app, in my experience, it was paid through IPSOS.
I see IPSOS shops on the PRESTO app, but I've never seen PRESTO shops on the Sassie portal.
If you kept up with your shop ID numbers look at them. PRESTO shops have a different numerical total than IPSOS shops.
You can also look on the PRESTO app under completed shops. I can see my shops going back to my 1st PRESTO shop in Jan. 2024.
IPSOS only shows your completed shops within the last year. You should be able to see an IPSOS shop going back to 02/26/2024, as of this reply.

Edited 1 time(s). Last edit at 02/26/2025 07:49PM by Sonicshopper.

So would the 1099 only come from PayPal? I don't know what the threshold for PayPal to send a 1099 is, but PayPal would combine all payments you receive from all sources into one 1099, I would assume. From what I hear the threshold was $5000 for 2024. Has anyone been sent one from PayPal for less than $5000 in CA or other state without a reduced threshold.

@xbirdnerdx I believe the threshold for 2024 was reduced to $5k for 2024 and will go down to $2,500 this year.

My reimbursements alone were far over that threshold, but I went through the 1099 month by month and it matched up with what Coyle sent me. Personal transactions were not included. Just the MS payments

So I think that threshold is for PayPal, but do you know if it is usually $600 for MSCs to send 1099s instead of $5000 or $2500. I'm not sure if mystery shopping is treated differently than something like ebay sales when it comes to 1099s.

@xbirdnerdx wrote:

do you know if it is usually $600 for MSCs to send 1099s ?

Yes they will normally send them out to shoppers who made $600 or more. I never had reimbursements included in my 1099's before, so it was always just based on labor. Not reimbursements

I received a revised 1099NEC from Ipsos today. I have received 2 1099NECs from Ipsos in the past. How do I tell which the revised 1099 is for? Is it for the Sassie or the SHopmetrics?

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How will the IRS sort out the differences between a 1099K and 1099NEC?

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