Overlapping 1099k and 1099nec

[sarahbrannon0]

This is my first time doing taxes and having a job.. So i need some help. I do self employment so i did receive an 1099nec which i filed and since i use Paypal for my payment method i also received an 1099k. How did i file both forms without them overlapping and being double taxed? 

[RobertB4444 · Accepted solution]

You have a couple of options.  Because this is the same income reported twice you can just enter it once and maintain records showing that this income was received from the one source and reported twice.  If any questions arise later you will be able to prove that you reported it properly.

Alternatively, you can report both forms but create an extra expense.  So the income goes in twice but the extra expense is called "Double reporting of Income" and is just a negative of the same number.

So if the 1099-NEC and the 1099-K are each for $1,000 then you would enter both of them showing $2000 in income.  Then you would create an expense for -$1000 so that your income goes back to the correct amount.

@sarahbrannon0 

[sarahbrannon0]

Thank you this is so useful! Which category do i pick to put the expense under? (assets, start up cost, office expenses, miscellaneous etc.)

[DianeW777]

The best category is miscellaneous expense which will allow you to name it so that you can clearly remember why you entered this expense. Use a description that will help you with that. As @RobertB4444 indicated, keep your tax document and records to prove the income was reported to you twice. Bank statements and/or your cash deposit account will provide the detail necessary.

@sarahbrannon0