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posted Aug 31, 2022 11:14:45 AM

Earnings Through Paypal as a Side Hustle, But I Have a Higher Source of Income at my Part-Time Job

I earned just over $600 in net pay through Fiverr. As a freelancer on there, we get paid through PayPal. However, my primary source of income is my part-time job which I already pay taxes for. Do I need to file a 1099-K if being paid through an app like PayPal is not my primary job?

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1 Replies
Employee Tax Expert
Aug 31, 2022 1:52:41 PM

Hello,

The 1099-K will be issued to you by paypal for the income and it needs to be reported on your tax return.

There are 2 ways to report the income.

  1. If it is a hobby then the income is reported on schedule 1 for the full amount of the 1099 no expenses allowed to be taken
  2. If it is a business then it would be reported on a schedule C (self-employed income). You would report the 1099 as income and then deduct the expenses you have against making that income. You would pay self-employment tax on the net profit.

 

Here are a few helpful links

https://turbotax.intuit.com/tax-tips/small-business-taxes/when-the-irs-classifies-your-business-as-a...

https://turbotax.intuit.com/tax-tips/self-employment-taxes/4-tax-tips-for-money-making-hobbies/L89qz...

https://turbotax.intuit.com/tax-tips/self-employment-taxes/beginners-tax-guide-for-the-self-employed...