Last year I used my credit card 3 times to pay my rent on PayPal. I charged the amount for rent and then withdrew it from my PayPal account and paid my rent. PayPal sent me a 1099-K saying it was income, right now I am getting double taxed on it. Do I need to report this? It was not over $20,000 or 200 transactions.
No, you don't have to report this. It's not taxable to you. If you have other actual income from PayPal transactions, report that. I advise you to keep the 1099-K with your records and make note of what this is about, so that if you need to explain this situation to the IRS at some point, you will have the documentation.
No, you don't have to report this. It's not taxable to you. If you have other actual income from PayPal transactions, report that. I advise you to keep the 1099-K with your records and make note of what this is about, so that if you need to explain this situation to the IRS at some point, you will have the documentation.
I have done the same thing recently and am very worried about it's legality now. I am happy to hear I don't have to report it as income but mine was on Square and it says in Virginia anything over $600 in card payments is reported to the state. I plan on paying off the card in full very soon as soon as possible. After doing research I am very worried that this is close to check kiting and I did not think it through plus there's videos all over YouTube telling you how to get cash off a credit card. Am I worried for no reason or do I have potential legal trouble?
I have every intention on paying the card off.
Revisiting this thread - with this new 1099-K - I actually wrote myself a few invoices to use my credit card to get the cash to pay rent and move a few bucks from one credit card to another. I am planning on receiving a 1099-K for these transactions (finding out the new rules). How would I account for this? I know they say to report it and then put a negative line with reasoning since a 1099-K is really only a list of transactions - not ACTUAL income.
certainly not taxable income. unless the iRS changes to tax forms, the above method would seem to be the only way to avoid taxation
Hopefully the IRS will address this issue but if they don't ... A tried and true method you can use it to report ALL the K-1 "income" reported as income on the Sch C so it matches what the IRS gets and then make an expense deduction for "cash out to owner" to negate the false income.