If I have been using PayPal to withdraw gambling winnings, I know I will receive a 1099K. I have made about $4,000 in withdrawals from PayPal. What will the tax rate be?

[TryingToHelp19]

Mine was there...under Statements and Taxes, then under Tax documents, and then on the right side under Business sales.  There was a message for me that said, "We updated this form on Mar 16, 2023, at your request".

What is weird is I requested this a month and a half prior to this date, but they said they could not fix it.  Then, all of a sudden, it was fixed and in my portal.  I was not informed by PayPal it was updated and placed there.  I checked because others in this group said they got one.

[Mrpiano1967]

Do you have a contact department at PayPal that helped you with the request?

[TryingToHelp19]

No, I just spoke with whoever answered at customer service.  You may just have to subtract the non-business amounts on your 1099-K from your taxes and explain the reasoning for it.  The instructions to do that are somewhere in this chat chain.

[Mrpiano1967]

This is such a headache!  First of all 1099K is like double reporting if you already receive a w2g. Secondly, these transactions are not goods or services and Paypal should be differentiated.   Probably has so many unaware taxpayers double reporting & overpaying. Hopefully they right these procedures asap. Thank you again!!!

[TryingToHelp19]

Agreed, but I learned this is not the fault of PayPal.  It is the fault of how the merchant/individual categorizes the transaction.  PayPal just reports it and is not allowed to change a transaction's category as they have no idea what each transaction is for.  That is why I asked Caesars to change how they categorize all of these in the future, per an earlier post.

There is not much else I can tell you about this.  It is what it is.

[Mrpiano1967]

Did you get anywhere asking Caesars to

re-catorgarize it?

[TryingToHelp19]

They said they would look into it, but who knows?  I do not use PayPal for these transactions anymore if I do not need to.  I was only using it when I needed to quickly move money between different sportsbooks.

Just an FYI, I will not be replying to this chat chain anymore as I think everything I can offer is somewhere within it including how to back out non-business transactions from a 1099-K in Turbo Tax, based on the research I did.

Note, I am NOT a CPA nor a CFP.  It is always recommended you do your own research and obtain advice from a CPA and/or CFP if you do not feel comfortable with certain financial transactions or decisions you make.

Good luck.

[vickyred]

How did you handle Paypal 1099K, did you negate or itemize the deductions?