I've heard that I do not need to send a 1099-MISC to a contractor if I paid them through PayPal, even if they made more than $600. Is this correct?
You'll need to sign in or create an account to connect with an expert.
Yes, you are correct that you do not need to send Form 1099-MISC.
According to the IRS Instructions for Form 1099-MISC, "Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC. See the separate Instructions for Form 1099-K."
In short, PayPal will issue Form 1099-K to your contractor. So you do not need to send Form 1099-MISC.
There are two choices in sending money: to a friend, to pay for services. Is the answer the same? I believe I have sent money via friend by mistake (the new dashboard no longer offers a clear choice). So far its only a $300 but could go over the $600.
A second question - if i pay someone $1000, then how does PayPal not sending anything until its over $20k remove me of the obligation to file a 1099?
Your question was posted to a an old thread that has a real mish-mosh of questions about PayPal, 1099"s etc. that may or may not be relevant to your own issue. It would be better for you to re-post your question as a brand new fresh thread --in which you are more specific about your situation. You do not say here why you paid your friend. You did not say if you have a business yourself or if you just paid a buddy for helping you do something around your home, etc. We need more information.
How about payment via Zelle$?
@wiseman Please read the reply directly above your own post.
What about the fees I incurred when sending funds via Family and Family option on PayPaL? Can I include the fees on the 1099 sent to the contractor? He requested that I use this method to pay him. The fees were for his benefit, can I pass the amt on to the contractor?
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
silentzypher
New Member
ImmigrantUser
New Member
zafira11
New Member
linaa15
New Member
rpruiz23
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.