1099-k

Forum|Forum|4 years ago
February 19, 2022
1 reply
4 views

My student daughter received a 1099-K statement from PayPal, but she can't find it in the Turbotax free e-file section while working on her W-2 form there.

It says something like this:

"You don't need to create a separate entry for your 1099-K info in Turbotax because your 1099-K income should be already included in other income, such as your self-employment or rental income."

She is working for a pizza company as a part-timer during the weekends, and that's why she received the W-2 form. Her work is not self-employment, right? Any help?

TurboTax Free Edition Online

Best answer by LenaH

Since the 1099-K is reported under her social security number, then it has to be included on her tax return. However, since it is not income (I'm assuming these were sales of personal items), you then have to subtract that amount from her return. By doing this, these amounts will net out to zero and there will be no tax effect to her. She cannot deduct a loss from selling personal items.

To report and offset the cost, please follow these steps:

From the left menu, go to Federal.
Scroll 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. It is essential that the full amount be entered.
  - For a description, include Form 1099-K and Personal Property Sales.
- Next, enter an adjustment to reflect the cost of these items as an offsetting, negative amount up to the amount of the income.
  - For the cost description, include Cost of Personal Property
  - In other words, if the goods cost you $100 and Form 1099-K was for $10 in sales, the maximum cost allowable would be $10.

@cspyon

LenaH

Community Manager

It depends. Why did she receive the 1099-K?

She would have gotten a 1099-K if she received payments:

From payment card transactions (e.g., debit, credit, or stored-value cards), and/or
In settlement of third-party payment network transactions above the minimum reporting thresholds as follows:
- For returns for calendar years prior to 2022:
  - Gross payments that exceed $20,000, AND
  - More than 200 such transactions

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cspyonAuthor

Level 5

She sold about $660 on an auction site, and got paid through PayPal.

So she doesn't have to report it?

LenaH

Answer

Community Manager

To report and offset the cost, please follow these steps:

From the left menu, go to Federal.
Scroll 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. It is essential that the full amount be entered.
  - For a description, include Form 1099-K and Personal Property Sales.
- Next, enter an adjustment to reflect the cost of these items as an offsetting, negative amount up to the amount of the income.
  - For the cost description, include Cost of Personal Property
  - In other words, if the goods cost you $100 and Form 1099-K was for $10 in sales, the maximum cost allowable would be $10.