This is my first year dealing with 1099-K forms in general, but I have a issue that I want to be fully 100% sure about. This is all for 2020.
My Patreon sent me a 1099-K form, but that income payouts to Paypal in order to reach my bank account. I noticed that Paypal has also sent me a 1099-K form claiming it's "Final version - Your copy of the form we send to IRS" updated on Jan 23rd. The issue is that the Paypal 1099-K form is counting every single Patreon transfer from the company into my Paypal account before it goes into my bank account, as if its not being counted by Patreon already.
So from the IRS point of view, if I don't report the Paypal 1099-K form. They're going to look at it as if I made double the real amount I did from Patreon and send me a letter?
When trying to contact both Patreon & Paypal support to clear up any misunderstandings, Paypal wasn't very helpful and pretty much told me that they're just following their protocol for the IRS. They wouldn't let me know if they'd be fixing the 1099-K form to show a corrected amount, nothing. Patreon went to their own tax team to ask and double check the details, but there could still be a communication problem between the two companies? (Below is what Patreon support sent me)
"I reached out to our Tax team and they asked to share this message with you:
Rest assured, we are hammering out the contract/details but Paypal will be issuing you an amended 2020 From removing the Patreon funds from their reporting. While the 1099K forms are due to Creator by the end of January, they are not due to the IRS until the end of March. As such, you should heard from Paypal by that time with an amended return.
Either way we’ll make sure you don’t get double reported.
Sincerely, Patreon Tax."
Now even if that is true, I've never had to deal with an amended return either before. So how exactly should I file my taxes here on TurboTax based on that? Should I fully file everything or hold off until I see something from Paypal first for the amended fix?
I just don't want to end up paying double the original amount I really did earn or not pay what I should from Paypal if there is anything to report with them, keeping the IRS off my back.
