topic TikTok and PayPal (Edit: I accidently posted this in the wrong forum, and I don't know how to delete). in Investors & landlords

TikTok and PayPal (Edit: I accidently posted this in the wrong forum, and I don't know how to delete).

guppy1 — Sat, 15 Jun 2024 00:51:00 GMT

(Edit: I know I put this in the wrong place, I don't know how to delete it. I'm sorry). Hi! I am a creator on TikTok and in 2024 have earned close to 930 dollars in revenue. This is my sole income as I am a dependent and student. The US only allows for PayPal to be the method of payout, meaning that the money I earn gets sent to PayPal - then I withdrawal it into my bank account from there.

With the new IRS $600 PayPal law, I will receive a 1099 from PayPal as well as TikTok. PayPal takes a 1.5% fee for processing making my 1099 from PayPal slightly different than the one I will receive from TikTok. When I file next year, will I have to add both forms to my tax sheet even though the PayPal one is the only amount I have earned? What will I have to do?

I know this may seem self-explanatory; however, I am uneducated in taxes and want to be prepared.

Thank you.

Re: TikTok and PayPal (Edit: I accidently posted this in the wrong forum, and I don't know how to...

JotikaT2 — Tue, 18 Jun 2024 15:50:56 GMT

For 2024, you will receive a Form 1099-NEC for the gross amount paid to you by TikTok. A 1099-NEC form is issued to those who are paid more than $600. When you file your taxes for 2024 in early 2025, you will need to report the amount you earned as reported on your 1099-NEC. Any processing fees paid to PayPal can be expensed as a deduction on your Schedule C as a reduction to the income reported on your 1099-NEC.

Since your payment is coming from PayPal, and if the amount remains at the amount you have mentioned above, you may not receive a 1099-K form. The threshold for 2024 is $5,000 but is slated to be reduced to annual payments over $600 in 2025. Make sure to report the overall income on your return and maintain accurate records should the IRS request support in the future. If you have payments reported on a 1099-NEC and the same payments are also reported on a 1099-K form, you only need to enter the amounts once. Essentially, you don't want to report the income twice if it's reflected on both forms as this would overstate your income.

Here are a few links to help guide you as well when it comes to tax filing season.

How do I report income from self-employment?

Reporting Self-Employment Business Income and Deductions

Re: TikTok and PayPal (Edit: I accidently posted this in the wrong forum, and I don't know how to...

guppy1 — Tue, 25 Jun 2024 18:13:12 GMT

Thank you! I appreciate you so much!