Paypal 1099K Form

[sandette41]

I received a 1099k from Paypal.   I am a travel agent and accept payments via Paypal from some of my clients to pay for group airline tickets and hotels.  Do I have to pay taxes on this money if I am not receiving a profit.  Please advise.  Thanks.

[Critter · Accepted solution]

You must report the income on your Sch C and then you can deduct the expenses that paid for ... in that way it is an "in & out" transaction ... and it is required or the IRS will send you a letter later. 

[FastDraw1]

If the income is reported normally on Sch C, how does the government know that it was reported? 

I reported 1099K income in my business income, but I received a letter from the IRS asking if that money was reported.  What should I do to clarify that income as being from the 1099K?

The 1099K income was through Paypal, but not in my business name.  Can I still just lump it all in my business income?

[Carl]

The income reported to you on the 1099-K is "reportable" income and must be reported on your tax return. I assume you are a sole proprietor and therefore report all of your business income and expenses on SCH C. In the program there is a selection as you work through the SCH C seciton of the program where you will indicate you received a 1099-K. Then you will enter the data asked for by the program, from the 1099-K.

The taxability of that income will be offset by the business expenses that you claim on the SCH C. Weather you make a profit or not is irrelevant. It's income to you and therefore you are required to report it.

[FastDraw1]

Can you be more specific on where this is? "SCH C seciton of the program where you will indicate you received a 1099-K" 

Under Personal income there is a 1099K question, but it says to just to list it under income.  If there is a place in the Business section to list 1099K income that would be good, but I can't find it. Basically I am wanting to find out how to put the income in there and label it as 1099K income.  Thanks.

[VolvoGirl]

Where under personal income did you see about 1099K?  You sure it wasn't about a K-1 form?

You enter it as Schedule C income.  Only the total gross income goes on Schedule C line 1. It isn't broken out by 1099Misc or cash or 1099K.

How to enter a 1099K

https://ttlc.intuit.com/community/entering-importing/help/how-do-i-enter-a-1099-k-in-turbotax-online...

[FastDraw1]

Personal Income: Other Common Income: 1099K. TT says that the government doesn't require separate filing for 1099K income.  However, I received a letter from the IRS asking if I included this 1099K income, so how would I clarify it to them?

[FastDraw1]

This is 2017 TT Home and Business.

[VolvoGirl]

Did you include it on sch C line 1?  Just tell them that's where it is.

[FastDraw1]

What I did was move the 1099K income in my Schedule C up from line 6 to line 1. This way line 1 is not smaller than my 1099K income.  Do you think that will work?

[FastDraw1]

Actually no, it was not on line 1 but line 6. Maybe this is the problem. My line 1 was smaller than my 1099K income.

Do I just do an amended return and state that it was moved from line 6 to line 1?

[VolvoGirl]

What was it doing on line 6 in the first place?  Yes it goes on line 1.

How to report self employment income

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/... 

I also have the 2017 Home & Business version.  I'll go look at the screens.

[VolvoGirl]

I made you 2 screen shots.  You didn't see these?  It goes under General Income

[FastDraw1]

I didn't think it mattered at the time as long as it was in any income section, so I put it there. 

When doing an amended form I would write in that I moved the 1099K income from line 6 to line 1?  That should be good then you think?  Thanks.

[tagteam]

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@FastDraw1 wrote:

When doing an amended form I would write in that I moved the 1099K income from line 6 to line 1?  That should be good then you think?  Thanks.

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If you received a letter from the IRS with respect to the figure that was on your 1099-K, why not simply respond to the letter telling them that you reported the figure (income) on Line 6 of Schedule C? 

Did the letter request an amended return or just a response? I am not sure why you would amend if the income from your 1099-K was included in the Line 7 total of Schedule C (the gross income figure).