So for some reason ebay had the paypal email going to my mothers email when it should have went to my own. Now she has a 1099K from Paypal saying she made $46K last year. My parents file their taxes together and are both on social security. I was looking online and found that there is something called "nominee payments". Is this what they have to do to file their taxes? Really need help with this and don't want to have them lose their SS cause it shows she made over the allowed $17K
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Firstly, check the “Payee’s TIN” on the Form 1099-K to verify to whom the payments were reported as “made to”. If the TIN is yours, and not one of your parents, it will not matter that it came to your mother’s email. If this is the case, there is no issue, and the IRS will expect to see that income on your tax return.
If the Form 1099-K was sent to the incorrect Payee/TIN (e.g., your mother) it will not impact that person’s social security eligibility. A person can be on social security and earn extra money, but beyond a certain amount that social security income will be taxed.
Assuming the 1099-K was sent to the incorrect Payee/TIN, you should contact the Filer and ask for a corrected 1099-K.
If for some reason the eBay transactions were processed using your mother’s account instead of yours, and/or you are unable to obtain a corrected 1099-K, the “work-around” steps have previously been recommended by @maglib, and I’m repeating those steps (for your parents return) here:
STEP 1: To enter/edit a 1099-K form:
STEP 2: Make an adjustment using the steps below:
The end result: 1099-K form is reported by your parents, but not taxable. You will include the 1099-K income on your tax return.
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