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joanngowen
New Member

How do I avoid double entry of my taxable Alimony received via PayPal? The new 2022 1099-K from PayPal & ALSO the 1040 Section 1 Line2a will BOTH require that same income

Will the new tax forms be prepared to handle someone who receives taxable Alimony Income via PayPal?  Both the 1040 and the 1099-K ask for this same income.   If I leave my 1040 blank then it will conflict with my Ex's claim of paying it.  If I don't file this large amount reported on my 1099-K from PayPal, I will receive a discrepancy error.
2 Replies
Mike9241
Level 15

How do I avoid double entry of my taxable Alimony received via PayPal? The new 2022 1099-K from PayPal & ALSO the 1040 Section 1 Line2a will BOTH require that same income

only if the divorce or separation agreement was entered into on or before 12/31/2018 is it taxable.

if it's taxable then note

there is no way to identify that it is alimony that is reported on the 1099-K and link the amount to the alimony line on schedule 1 and if you use the adjustment line to zero out the amount nothing will appear on your schedule 1. if you don't zero it out through the adjustment line 

 the amount will appear on line 8z which will cause a problem because the alimony line will be zero and you'll get a matching notice because your ex's return will report your SSN and alimony on her return.

I see 3 options 

1) ignore the 1099-K and only report on the alimony line. not reporting on line 2 will almost certainly create a matching notice.

2) report on both the 1099-K  and the alimony (thus double reporting at this point)  then enter a negative amount on line 22 of other income to negate the 1099-K. a description like "1099-k as alimony on line 2"

3) mail in your return with a letter of explanation. In my experience, the letter is usually ignored because the handling is done by data entry clerks.   

 

option 2 may also create a notice but I would probably go with it.   

 

see what others say.  

 

 

 

 

 

 

 

eventually, you'll come to a question in the section about less common income that includes alimony. this is where you'll enter the alimony received as well as the date of the original agreement and if it was modified to make the alimony non-taxable.

if you get a question about the 1099-K from the IRS you respond that the 1099-K represents alimony received through PayPal as reported on schedule 1 line 2

 

Critter-3
Level 15

How do I avoid double entry of my taxable Alimony received via PayPal? The new 2022 1099-K from PayPal & ALSO the 1040 Section 1 Line2a will BOTH require that same income

Interesting that the ex pays using paypal ... but the IRS has not put out directions for those in these kinds of situations yet, hopefully they will by the end of the year. 

 

Contact paypal and see if there is a personal designation that can be put on these payments as only business transactions require a 1099 to be issued. 

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