@skogensover wrote:
I've read that currently, we need to send 1099s to people paid via Paypal Friends and Family accounts. You don't send 1099s to people paid solely from Paypal business accounts.
If you are a business, you are required to issue a 1099-NEC or a 1099-MISC for certain payment that you make to other businesses (subcontractors, vendors, etc.). This includes sole proprietorships, independent contractors, partnerships, and LLC. You don't need to issue a 1099 if the contractor or vendor you are paying is an S- or C-corporation. It doesn't matter what kind of account is used to pay the money, and in fact, even if the payment is made in barter, you must issue a 1099 if the dollar value is more than $600.
You do not issue any 1099 form for personal expenses.
The payment processor may be required to issue a 1099-K, but that is also never issued by an individual. Just because the payment processor issues a 1099-K does not mean the money is considered taxable income, but it means the IRS will be taking a closer look at it.
