Middleman / 1099 - Not a business, no profit

[jaseva]

I collect payments using a payment processor from team parents for specific sporting events. I then take the money and pay the team registration fees for the events. I do not do this as a business and I don't make a profit. I'm just a random parent who runs an all star team. The team itself is also not an official business. I will get a 1099 for these payments I've received through the payment processing company. How do I report that the money came in, but then went straight back out to pay for the events and that this isn't my personal income to pay taxes on? 

[Vanessa A]

Which payment processor are you using?  Are the other parents sending this as a friends and family payment or are they sending it as a business payment? For something like PayPal, if they are using friends and family, you will not get a 1099-K, and Zelle does not send 1099-K's at all. Venmo reporting says the same thing. 

So, if it is being sent as friends and family, then you will not likely get a 1099-K. 

However, if they are listing it as business services, then you will get one if it is over the reporting limit that the company you are using is following.  If this is the case, generally, you would need to file a 1099 form with the IRS to allocate it to the actual entity that received it.  In your situation, since there is not an entity that is receiving it, you would need to enter the 1099-K on your return in the spot for the 1099-K and then you will go to Other Reportable Income and enter the same number as a negative with a description noting why this is not your money.  

To enter the negative income select the following:

• Federal
• Income and Expenses
• Scroll down to Less Common Income and click Show More
• Start next to Miscellaneous Income
• Start next to Other Reportable Income

This will put it on line 8z of your schedule 1 as other income to offset the 1099-K  also reported on Schedule 1.