1099-K

[ericdownes]

For the first time ever, we received a 1099-K. This one came from a PayPal entry, and we should not have gotten it. Our daugher was paying us back for something, used PayPal, and it seems that their system defaulted the type of payment to "goods and services", thus putting it into a business transaction category. PayPal says that since they already submitted this to the IRS, there's nothing they can do. We'd rather not risk an audit, so we were attempting to pay taxes on it anyway (via TurboTax), but the software does not appear to allow entry of the details on the form, presuming that such information would already be captured in the overall filings for a business.

Any idea what we can do? Can we enter the form manually? Any other options?

[DanP0428]

Enter as less common income and then the last option miscellaneous income.

[LeonardS]

To report your 1099-K from PayPay and not have it included as income follow these steps:

1. Log in to your TurboTax account if it is not open.
2. Select the Wages & Income tab.
3. Scroll down to Less common income click Show more.
4. On the page Let's Work on Any Miscellaneous Income click on Other reportable income.
5. On the page Any Other Taxable Income?  select yes.
6. On the page, Other Taxable Income enter PayPal 1099-K Personal for the description and the amount.
7. Select continue and answer No on the next page.

Next, you will have to offset your PayPay 1099-K.  Follow these steps to offset your 1099-K:

1. Log in to your TurboTax account if it is not open.
2. Select the Wages & Income tab.
3. Scroll down to Less common income click Show more.
4. On the page Let's Work on Any Miscellaneous Income click on Other reportable income.
5. On the page Any Other Taxable Income?  select yes.
6. On the page, Other Taxable Income enter PayPay 1099-K Personal for the description and the  amount as a -number for example  -1,200.
7. Select continue and answer No on the next page.

This process will report the income form the 1099-K in the first entry and then "back-it-out"  as personal in the second entry.  @ericdownes