You need to keep your own records of payment for services and reimbursements. Some MSCs include reimbursements on 1099 forms even though they should not. A bigger concern is that companies that use PayPal to send you money should not be sending out 1099 forms for Tax Year 2022. Instead, PayPal will be sending a type of 1099 which aggregates all funds sent to you by PayPal in TY 2022. That includes payment for services, reimbursements, and even money you get for selling a lamp to someone if they pay you using PayPal. It will be up to you to consult your records to determine which MSC sent you money (and how much) for payment for services, how much you received for reimbursements, etc.
There are different ways of sorting this out. I personally show all money I receive (for services and reimbursements) on Schedule C as revenue received, and then I listed reimbursement (and expenses for copies, paper, ink, etc) on a different line on Schedule C for business expenses. When you are reporting business income (net positive or net negative for the year) on Schedule C, there is no percentage involved. A deduction on Schedule C reduces your Schedule C business income.
The change in how PayPal is required to report will be new for TY 2022, and there is a lot of confusion even on this Forum. Many of us keep records using Excel. Some still use paper. Don't forget to keep track of mileage driven for mystery shopping. The IRS mileage rate for January 1 to June 30, 2002, is $0.585. This year, it will change on July 1st and increase to $0.625 per mile. The standard IRS mileage rate has traditionally amounted to about 1/3 of my gross MS gross payments for services, so it is important to track.
Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008
Edited 1 time(s). Last edit at 06/20/2022 06:22PM by myst4au.