New 1099-K Question

So my question is, if Paypal issues and reports all income on 1099-K, but the mystery shopping companies also send out their own 1099. Some of that income would be double reported wouldn't it? Also, the payments that come to us though Paypal would also include the reimbursement for the shops which are not taxable. I know how to write off the business expenses and all that, but this just seems like next year is going to get confusing at tax time.

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This has recently come up before. This is my approach. I list every 1099 form on my income tax as revenue (Schedule C). I then list all reimbursements as business deductions (again on Schedule C). The issue of double-counting revenue is a relatively new problem. Again, my approach would be to list the double revenue amounts (once, of course) as a business expense with an explanation. That way, if the IRS ever questions what I did, it would be clear. All 1099 forms would appear on my return so they could match up revenue, and I have taken care of the double-counting in a totally transparent manner.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

That is a great solution. I will follw this example. Thank you.

@myst4au wrote:

This has recently come up before. This is my approach. I list every 1099 form on my income tax as revenue (Schedule C). I then list all reimbursements as business deductions (again on Schedule C). The issue of double-counting revenue is a relatively new problem. Again, my approach would be to list the double revenue amounts (once, of course) as a business expense with an explanation. That way, if the IRS ever questions what I did, it would be clear. All 1099 forms would appear on my return so they could match up revenue, and I have taken care of the double-counting in a totally transparent manner.

I understand your approach, but it was my belief that 1099s sent by MSCs don't include reimbursements. If they do, then I've certainly been getting overtaxed for many, many years.

I also am quite anxious about tax season next year. I think it's going to be very confusing. I do a lot of different things that get paid through Paypal. Some are fully taxable and some will require some work to find the taxable amount. And some payments aren't taxable at all, such as reimbursements. I'm worried it's going to be a mess.

Some MSCs include reimbursements on their 1099s; most do not. As a business owner YOU are responsible for maintaining records that distinguish fees from required purchases. Also, I found that Paypal has a way to print a breakdown of which payments came from which MSCs or other sources, which can be very helpful.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

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Yes, the companies that I work with do not include reimbursements on their 1099. It will be very helpful in Paypal to be able to sort the payments from different MSCs. I've never received a 1099K before so I really don't know what one looks like and how detailed it gets. I'm just hoping next year isn't a PIA.

Thanks for the help and suggestions guys. I remember a few months back (although I can't remember where for sure), reading that there is suppose to be a place on the tax form or something to make a comment stating 'Income already reported on another 1099 or form".

Also, most MS companies don't include reimbursements on the 1099s, or at least they shouldn't be.

Have a great day.

Which category do you file the purchased item expenses under? Other Miscellaneous Expenses?

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