Wife uses my paypal 1099-k is in my ssn name

[Josparky]

So if my wife has always used my paypal it is only used for her business. We got the 1099-k and it is in my name. So how do we fill this out do we just put the 1099-k on here schedule C and they will file it under her business. This new law is going to get real confusing for people that have done this. I need this income to go under her name not mine. Would this be the correct way to do it. Also where does the 1099-k info go in at on turbo tax home and business.

[Vanessa A]

Since the 1099K is not actually entered on your return as an individual item and should be already accounted for with the rest of the income from a business, you can just keep the form with your taxes with an explanation that your wife is using your PayPal account and show that the income is accounted for on her return.

For the future, it may be easier if she gets her own PayPal account because of the new 1099K reporting rules. 

[Josparky]

Thanks for your answer so then there is nowhere that the 1099-k goes in turbo tax then? I am assuming when they see the 1099-K come in in my name that they will look for it on our joint return and see that it is on her schedul C business then and it will go down as her income and not mine. I did put it in on the General Income on her schedule C in turbo tax and wrote this in the line. 1099-k Income Reported from my husbands paypal account will they look at that and see what is going on? Need this to go down on here income as I am disabled. I was not aware of all this 1099-k stuff. I am assuming that they will just want to see where the taxes where paid on the money and it will not affect me?

[ThomasM125]

There is no direct entry screen for the 1099-K , you enter it as you did as business income not reported on a form 1099-NEC. It is unlikely the IRS will read the description you entered for your business income.

I understand your concern that the 1099-K income is in your name but will appear on your spouse's business schedule C. It is possible that this could cause an issue, however you have reported the income properly so you have a good explanation if the IRS should query you about it later. If you want, you could make a business entry for yourself, reporting the income under your name, and then enter a "Commission" expense for the same amount as the income so your net income will be zero.

[Josparky]

What is a commission expense?? Seems odd for me to create a business in my name when I don't have one?

[ThomasM125]

A commission expense is a generic name for money sent to another person or entity. You don't need to create the business if you don't want to, it is just a work-around suggestion.

You could also report the income as "Other Income" and then put in another entry for the same amount as a negative number to cancel it out. This would be in TurboTax in the Wages and Income area, then Less Common Income, then Miscellaneous Income, then Other Income.

[Josparky]

So is any of this needed if I just claim it under her schedule C business. If put in as other income it just goes in as money for us both still since it is a joint file wouldn't it?? I just want to somehow let them know that the 1099-k from my paypal is her income for her business and not mine. Looks like they would figure that out but not sure they are that smart. We are not hiding income but just need to let them know that it was not my income since paypal sent them a 1099-k saying it was and I am disabled. I don't want them to just cut my disability off due to this. I would think they would see where the money went to her schedule C. This sure is making all this hard something the government seems real good at. We are not hiding anything and have always used the paypal account for this and claimed the money. We are just afraid it will cause them to think that the income is mine now. I guess they would contact us about it if they have questions. I hope.

[ThomasM125]

If you complete a schedule C, that income will be designated to belong to the person listed on it, so if you report the income under your spouse's schedule C, it will not be applied to you.

[Josparky]

So this is what I was looking for so even though the 1099-k from paypal has my social on it for the income since we file jointly when we apply the income from that 1099-k to the schedule C for her business then they apply it to her instead of me. If I am understanding this correctly. 

[ZoltanB45]

The 1099-K goes into self-employment income. You can enter the revenue on her schedule C with the LLC name on the top.

[Josparky]

There is no LLC it is a freelance side gig she does outside of her regular job. She has always claimed the money on a schedule C with turbotax under her social security number

[DawnC]

Keep doing it the way you always have.  Report the income on her Schedule C.   You are filing a joint return with her, and the income is being reported where it should be, business income on Form 1040..   In the very unlikely event they send an inquiry, you have your records of what occurred and she has the details of the income, so you won't have an issue.   It happens a lot and doing it the same way you have been is less likely to spur an inquiry.   

Make sure she deducts the processing fees included in the gross receipts of the Form 1099-K.   Why is my 1099-K different from what I actually got paid?  (this is about an Rideshare 1099-K, but the same principle applies.  

[Josparky]

Thanks for your answer. She does keep very good records every year of the PayPal fees and receipt of all supplies, expenses and mileage on the car used for business through the year. We store those records each year for 7 years back in our records.