1099 Question

Does the 1099 threshold of $600 include fees and reimbursement or only fees? I think it should be only fees.

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It should be only fees, but in the past, some MSCs have included reimbursements as well, so your detailed records become important. When it comes to the new 1099 rules for PayPal, Paypal will report the aggregate of all money sent to you. They have no way of distinguishing between fees and reimbursement since they are just told to send a specific amount of money. Records. Records. Records.
@Dalewoosley wrote:

Does the 1099 threshold of $600 include fees and reimbursement or only fees? I think it should be only fees.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008
Threshold for whom? I'm not sure what you're asking. I think some MSC's include both fees and reimbursements. If the MSC includes both, you can include both, then back out the reimbursements as deductions. That way the gross amounts match (your records and the 1099s), and the net result is the same amount of income. So, as myst4au notes, your bookkeeping has to be meticulous.

If you're asking about the threshold for you, you have to declare *all* income for the year from each MSC, even if less than $600, and can include fees only or fees and reimbursements. Then, again, deduct the reimbursements as expenses. It works out the same either way. One's just a little easier from a bookkeeping standpoint.

I learn something new every day, but not everyday!
I've learned to never trust spell-check or my phone's auto-fill feature.


Edited 1 time(s). Last edit at 09/18/2022 09:11AM by BirdyC.
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