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jgalde
Returning Member

Does this impact me if I don't have a business account on Paypal, etc?

Does this impact me if I don't have a business account on Paypal, etc?

4 Replies
Opus 17
Level 15

Does this impact me if I don't have a business account on Paypal, etc?

I believe the rule applies to any third-party payment processor that takes credit card payments and sends you the money.  The most common reason for doing this is someone who has an eBay account or an Etsy store. The rule will also apply to crowdfunding campaigns, even if there is no business purpose (such as a request to help with medical bills) and this will need to be explained on the tax return.

 

If you don’t have an account with any third-party credit card processor, then I don’t see why you would ever receive a 1099-K. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
Opus 17
Level 15

Does this impact me if I don't have a business account on Paypal, etc?

Or to put another way, the rule applies to any credit card processing arrangement, regardless of whether the original intent was business or personal. If you receive large personal payments, you may receive a 1099-K.  Getting a 1099K does not automatically mean the money is taxable, but it means you have to include an explanation on your tax return.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
jgalde
Returning Member

Does this impact me if I don't have a business account on Paypal, etc?

Ok, so does it matter if its a business account? or no it doesn't matter, they are doing this regardless of it being a business account.

Opus 17
Level 15

Does this impact me if I don't have a business account on Paypal, etc?


@jgalde wrote:

Ok, so does it matter if its a business account? or no it doesn't matter, they are doing this regardless of it being a business account.


The payment processor is required to issue the 1099-K for every account with more than $600 of transactions.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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