1099-K from Paypal and I don't have a business

If the money received through PayPal is borrowed money, then it is not income and you do not need to report it on your tax return.

You do not enter this form 1099-K, but keep it in your tax records with any proof you may have that it is borrowed money, in case the IRS has questions on it.

Thank you for your response. But since IRS received my 1099-K I would like to include the amount on my Tax Return. Is there a way to do it without claiming it as an income?

The Form 1099-K is not a form that is entered or sent to the IRS with your tax return. As @MinhT1 indicated, a loan is not income and does not get reported on your tax return.  Keep the form, notes and details with your tax return to verify the loan and repayment for future use should you need them.

PayPal is considered a payment settlement entity(PSE) for money transactions.  Form 1099-K was introduced to report income received from electronic payments, such as credit cards, debit cards, Google Checkout, PayPal and other payers. You should receive this form if you received payments from electronic or online payment services, or credit and debit card transactions.

Q. Is there a way to do it without claiming it as an income?

A. Yes. You have to use a workaround in TurboTax.

Notice that there is no specified place, in TurboTax (TT) for a 1009K.  That's because you are supposed to know what the income is for.

In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in  Home & Business)

 - Wages & Income

Scroll down to:

-Less Common Income

      -Misc Income, 1099-A, 1099-C

       - On the next screen, choose – Other reportable income  

       - On the next screen, click yes

       - On the next screen, you'll get blanks to enter the amount and a description. It will go on line 8 of Schedule 1 as "Other Income".  Suggestion for description: erroneous income on 1099K

When that's done, do it again (a 2nd entry).  This time make it a negative entry; put a minus sign (-) in front of the amount. Suggestion for description: erroneous income on 1099K offset

I was reading the replies to the 1099-k question.

I using TT business for the first time to file my s-corp. After doing the Fed and then purchased the NY state(NYC SCORP), it occured to me TT didn't ask me for my Paypal or Strip 1099-Ks to report. Would I get in trouble? Used TT home and business 2019.

I did purchase Audit defense just in case.

It depends.  Your reported revenue needs to be at least the amount reported by the total of the Paypal and Stripe 1099-Ks.

If the Paypal and Stripe 1099-K statements report more transactions than the gross revenue amount you reported you can expect a letter from the IRS for unreported income.  

Please clarify the business entity you had in 2019. 

TurboTax Home and Business does not support S-Corporations. 

You also should ensure Paypal and Stripe are reporting under the proper business EIN and not under your social security number.

I've got a question regarding what is considered loan or borrowed or not?
I also got a form 1099-K from Paypal. I bought two items that I never used and I was doing payments. In the end, I ended up selling them just to pay them off. 
Would that be considered borrowed or loan?  Since I sold them to them off.

@Gerbo20 If you sold the items for a profit, then the IRS might wonder if you are buying and selling goods. You can report  just the profit as other income. If you lost money, no worries and nothing to report.

If you are reporting it, follow these steps:

1. Log into your return
2. Federal
3. Click on Income
4. Scroll to the bottom section, Less Common Income
5. Select Miscellaneous income, 1099-A, 1099-C, start
6. Select Other Income
7. Did you receive other wages? Yes
8. Continue
9. Household employee? Continue
10. Sick or disability pay? Continue
11. Any other earned income or wages? Yes
12. Enter source of Other Earned Income
13. Select Other
14. Continue
15. Enter description Sale of purchased items
16. Enter amount

Thank you @AmyC .  I think I might lose some money since first I couldn't return the item and the money gotten from the sale was lesser than the amount financed to pay.

Hal-Al, you still stand by this response? I've heard pretty much the opposite of this from Intuit Support ie "if you get a 1099k that includes personal payments you have to go ahead and pay taxes on those payments as you got the 1099k because you are using a business PayPal acct and there is no 'personal monies' in a business acct' (or something like that

I assume what you've said is accurate but I'm asking you to confirm. THANKS!!

@ABALLIETT 

You're involved in (at least) two different threads that are are going in all different directions.

Notice that there is no specified place, in TurboTax (TT) for a 1099-K.  That's because you are supposed to know what the income is for.  The above doesn't tell you that it isn't taxable. It just tells you how to enter it, in TurboTax, once YOU decide it isn't taxable. 

The other thread (https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-where-do-i-write-off-obsolete-inventory-which-i-have-either-trashed-or-donated-thank-you/01/2229438#M208336) tells you how to determine if it's taxable  and is supported by other high level users and this TurboTax  "fact sheet" https://turbotax.intuit.com/tax-tips/self-employment-taxes/a-tax-filing-factsheet-for-ebay-sellers/L7h6uJr0i

It's my opinion that, based on your description, you just have an online "garage sale". 

I'm obviously still searching for an answer to my question and ran across this entry by you on google

I'm asking if you still stand by this answer or the answer you gave me in the other thread. 

Can you answer this question? 

Thanks

Q.  I'm asking if you still stand by this answer or the answer you gave me in the other thread. 

A.  Both, They're two different questions.

What specifically is the question that you're looking for an answer to? 

Are you asking does having a "business PayPal acct" change how "online garage sale" income should be reported?  I doubt it, but have no specific knowledge of that.  Does it increase your audit risk? Probably,  but have no specific knowledge of that.

Thanks for you patience, Hal_Al 

What I'm asking this time is how do I handle non sale 'payments' that are on my 1099k but that I did not 'profit' from 

For example, I do lots of environmental non-profit work I do a podcast and have substantial publishing changes (libsync) that a non profit is obliged to pay for since I work for free but they expect me to be the go between for my acct with the service provider. So they send me a few $300 checks a year and I pass that money to libsync in a separate payment transaction

Those $300 payments show up as 'income' on the 1099k, although they aren't even my money. 

How do I remove them from the official 1099k total? (I think you showed how to do that and I was just asking if you still believe that method is accurate and dependable) 

Thanks

Please post to the other thread, to keep the discussion in one place and with more eyes on it. 

I have a similar situation and the other thread didn't seem as appropriate.  Basically, I have a PayPal account used for a boy scout troop to facilitate dues payments and collect money during an annual mulch fundraiser.  This money is taken from paypal directly to the troop checking account.  Since this isn't personal income, do I ignore it when entering info into my personal taxes in TurboTax, or does it need to be recognized and then offset elsewhere?

Enter the 1099-K in TurboTax (see below) and add a separate line item with a negative amount that represents the payments that were conveyed to the Boy Scout troop as dues or fund-raising receipts.

To report the income:   

• Type "other reportable income" in the search window (or in the Search Topic window for desktop versions)  

• Click on "jump to other reportable income  (or "other reportable income" in the Search Topic results)  

• Answer "No" to "Did you receive any other wages?"  

• Select "Other reportable income" from the Miscellaneous income list  

• Select Add another Income item  on the Other Miscellaneous Income Summary screen  

• Enter a Description ("1099-K Boy Scout Dues"?)and the amount reported,  then click on Continue  

The amount will be reported on line 8 of Schedule 1 (Form 1040).  

To enter the adjustment:    

• Type "other reportable income" in the search window (or in the Search Topic window for desktop versions)  

• Click on "jump to other reportable income  (or "other reportable income" in the Search Topic results)  

• Answer "No" to "Did you receive any other wages?"  

• Select "Other reportable income" from the Miscellaneous income list  

• Select Add another Income item  on the Other Miscellaneous Income Summary screen  

• Enter a Description ("1099-K Boy Scout Dues"?) and the amount as a negative number,  then click on Continue  

A corresponding negative amount will be entered, and line 8 of Schedule 1,  will be zero.  

My son picked up and expensive handbag for a friend and paid for it.  She reimbursed him on Paypal after he sent her a PayPal bill.  Now he has a 1099 K for $1593.75.  He was just doing a favor for a friend and she is the owner of the bag.  

What to do?

Enter the 1099-K in TurboTax (see below) and add a separate line item with a negative amount that represents the reimbursement from his friend.

To report the income:   

• Type "other reportable income" in the search window (or in the Search Topic window for desktop versions)  

• Click on "jump to other reportable income  (or "other reportable income" in the Search Topic results)  

• Answer "No" to "Did you receive any other wages?"  

• Select "Other reportable income" from the Miscellaneous income list  

• Select Add another Income item  on the Other Miscellaneous Income Summary screen  

• Enter a Description (Reimbursement via 1099-K) and the amount reported,  then click on Continue  

The amount will be reported on line 8 of Schedule 1 (Form 1040).  

To enter the adjustment:    

• Type "other reportable income" in the search window (or in the Search Topic window for desktop versions)  

• Click on "jump to other reportable income  (or "other reportable income" in the Search Topic results)  

• Answer "No" to "Did you receive any other wages?"  

• Select "Other reportable income" from the Miscellaneous income list  

• Select Add another Income item  on the Other Miscellaneous Income Summary screen  

• Enter a Description (Cost of 1099-K Purchase) and the amount as a negative number,  then click on Continue  

A corresponding negative amount will be entered, and line 8 of Schedule 1,  will be zero.  

I received a 1099k form from PayPal but most of the money was my son transferring money he had borrowed.  Do I have to report that?

Yes, it should be reported. However, it should not be taxed. The IRS receives copies of all government forms and reconciles that information to what is reported. Therefore, report the income and report the gift. It will result in $0 total. 

• If you have a PayPal account for business use, then report the amount from your son as a refund or rebate in the income section to offset it.
  • Report Form 1099-K as received in the COMMON INCOME section under Other self-employed income, includes 1099-K, cash, and checks
  • Report the amount that was given to your son under LESS COMMON INCOME using Rebates and refunds, includes any income returned to customers, which will be a reduction of the income paid back.
• Otherwise, for personal expenses and reimbursement, report both the income and the expense (as an offsetting negative amount) as Other Miscellaneous Income. 
  • To do this in TurboTax Online, follow these steps:
    • From the left menu, go to Federal and select the first tab, Wages & Income
    • Add more income by scrolling down to the last option, Less Common Income, and Show more
    • Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start
    • Choose the last option, Other reportable income and Start and Yes
    • Enter the applicable description and amount and Continue
      • First, enter Form 1099-K as received labeled something like Form 1099-K personal reimbursement. 
      • Next, enter an adjustment to reflect the personal reimbursement as a negative amount labeled something like Form 1099-K personal expense.

@Stacy71276

you said that you used TT business, then you sand that you used TT home and business.  

So which one did you use?  Turbo Tax home and business does not tell you that if you are an S-corp you cannot file your business taxes with TT home and business, You must file your business taxes with TT business, then when you do it will produce a 1099 for you to use when you file your personal taxes with TT home or home and business (you dont need to use home and business if you are an actual S-Corp or corp because you dont claim any business expernces on TT home and business because you do that with TT business when you file your business taxes which are separate from personal.  When you do use TT business then you must use the 1099-k from PayPal as your business income under your business filing using TT business NOT your personal or else you will pay Self Employment tax which is 3 times or more than when you file correctly under your actual business using TT business, then you report the 1099 from your actual business as other income on your  personal taxes and the tax is only what the standard tax table for that amount is when you are down to your actual taxable income.  That is the advantage of having the S-corp election for tax purposes bc it is passed through on personal taxes and not taxed as self employment,  BC you are not self employed you are employed by your business ,  If you did not claim you 1099 on your business tax and you claimed it as SE income on your personal then you would of overpaid in Taxes by probably 75%.  You will need to amended both your business and personal returns and claim the PayPal 1099 on your business and then file you personal as amended as well and you may get $ back  that way as well bc chances are you file incorrectly and you overpaid.  

And it doesn't matter if you paid for Audit defense bc if you did not claim income as reported to the IRS they will send you a letter stating that you owe tax on the amount reported on the 1099-k

I don’t own a business and use PayPal to play games online now I got sent 1099k from PayPal

Can you clarify @Sassyp why you are getting money through PayPal?

Even if you don't have a business, if you are earning rewards by playing games, you may have hobby income that's reportable on your tax return.

To enter hobby income:

1. Type "hobby income, loss" in Search in the upper right
2. Select "Jump to hobby income, loss"
3. Answer the questions on the screens.

You can no longer deduct expenses from a hobby.