Hello! I recently started working part-time for a tutoring company, which pays through Paypal. I've also been earning small payouts (also through Paypal) by completing online surveys. I've been consistently tracking the payouts and keep a running total, but is there a special way I need to report the income? I saw in an existing post in the forum stating that we can self-report, even without a 1099, but I would imagine that there also needs to be formal documentation for federal tax purposes? Would it truly simply be a matter of reporting income by company that sent me funds via Paypal, even if I do not receive formal documentation (either because I do not break the $600 threshold or because the statement does not indicate income by vendor)?
Thanks for your help!
Hi @Lyss20, you may or may not receive a 1099-K depending on the amount of earnings you receive from your PayPal transactions if you break the threshold, as you mentioned in your post.
Here is a helpful article regarding how to handle PayPal transactions: https://ttlc.intuit.com/community/income/help/how-do-i-report-a-1099-k-if-i-don-t-own-a-business/00/2605886
Hey Lyss20,
As you mentioned not everyone will send a 1099 form as "formal documentation". The IRS still wants you to report all income received even if it's cash. Keeping track of the income as you receive it is smart as it makes it easier for you to report. When you go to file you will be asked about having self-employment income and this section is where you'll enter all income received and expenses incurred, and this becomes your official reporting in your tax return.
Below is a link to our section dedicated to self employed individuals like you.