topic Amending return after receiving a 1099-K from paypal for rebates in Get your taxes done using TurboTax

Amending return after receiving a 1099-K from paypal for rebates

Lily30 — Sun, 26 Jan 2025 01:25:48 GMT

I just filed a few days ago and my return was accepted. I thought I was done and wasn't expecting anymore forms to add to the return. Then I get an email from paypal saying my 1099-K form was ready. Apparently I received a little over $5000 in payments.

However, these aren't actual payments, they're rebates.

Now my question is how do I fill out a 1040-x to include the $5000ish from paypal and then write it as a personal loss to remove it as income? I'm probably going to print out the 1040-x and mail it in with the 1099-k form, I just don't know how to fill it out and if there's another schedule form I need to send.

Re: Amending return after receiving a 1099-K from paypal for rebates

JamesG1 — Sun, 26 Jan 2025 15:40:27 GMT

If your return has been transmitted and rejected by the IRS, you can correct your tax return and re-transmit.

If your return has been transmitted and accepted by the IRS, you will have to amend your Federal 1040 tax return. However, before amending your tax return, do not enter the return and do not make any changes.

Amended tax returns will not be available around the middle of February. See forms availability here.

If you used TurboTax Online, log in to your account and select Amend a return that was filed and accepted.

If you used the CD/download product, sign back into your return and select Amend a filed return.

Re: Amending return after receiving a 1099-K from paypal for rebates

Lily30 — Sun, 26 Jan 2025 22:05:44 GMT

Thanks for all the information but how would it be reported on a 1040-x form?

It's a "loss" because the 1099-k is money back from multiple rebates throughout the year

Re: Amending return after receiving a 1099-K from paypal for rebates

KeshaH — Sun, 26 Jan 2025 23:23:19 GMT

If the rebates are cashback rewards, they are considered discounts on purchases and not generally taxable.

However, if the rebates are business related you would need to reduce your related expenses which will increase your net income and impact your tax liability. Alternatively, you can report the rebates as other income if it's not feasible to determine which expenses the rebates apply to.

If the rebates are not business related, you can report the amount from the 1099-K as other income and then include another line that shows the same amount as a negative to zero it out.

First, set up the amended return within TurboTax. Note that the 1040-X will not be available within the program until mid-February.

To report the 1099-K:

- within your account, navigate to Federal, then Wages & Income

- scroll to Other Common Income

- choose Start next to 1099-K

- on the screen that asks if you received a 1099-K, select Yes

- when asked which type of income the 1099-K is for, choose Other

- enter the details from the 1099-K

- click Continue

To zero out the income:

- navigate back to Wages & Income

- scroll to Less Common Income

- choose Miscellaneous Income, 1099-A, 1099-C

- click Start next to Other Reportable Income

- On the screen that asks if you have any other taxable income, select Yes

- For the description, enter 1099-K Cash Back Rewards. In the amount box, enter the negative amount.

- Click Continue.

@Lily30