TurboTax Advisor Says No More 1099-NEC if You Get A 1099-K????

That can’t be right, right? I should still get a 1099-NEC from the MSC too, correct? Her advice was that if you get paid through PayPal, you won’t get the NEC. If you got paid via direct deposit, you would. Sounds weird since PayPal could be someone re-paying me for gasoline if I gave them a ride to work, a refund for something I returned that I bought through PP... Any thoughts?

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I received both. A PayPal one with the whole summary, etc., from all the payments I received from all PayPal payers. And individual ones from the different MSC's.

Think of the 1099-NEC as your old 1099-MISC. The 1099-MISC is still around for other purposes. Again guys, do your own due diligence! You may have to review the reported amount further. And don't take the word of a support agent or local chain to the bank. Aren't you all ICs?!

Edited to add: 1099-K may be sufficient for other lines of gig-work.

Edited 1 time(s). Last edit at 01/28/2025 01:53AM by Okie.

@metro25782 wrote:

That can’t be right, right? I should still get a 1099-NEC from the MSC too, correct? Her advice was that if you get paid through PayPal, you won’t get the NEC. If you got paid via direct deposit, you would. Sounds weird since PayPal could be someone re-paying me for gasoline if I gave them a ride to work, a refund for something I returned that I bought through PP... Any thoughts?

I guess we will see. So far, I don't have any 1099-NEC's this year. I should have at least 10.

@BayShopper22 wrote:

@metro25782 wrote:

That can’t be right, right? I should still get a 1099-NEC from the MSC too, correct? Her advice was that if you get paid through PayPal, you won’t get the NEC. If you got paid via direct deposit, you would. Sounds weird since PayPal could be someone re-paying me for gasoline if I gave them a ride to work, a refund for something I returned that I bought through PP... Any thoughts?

I guess we will see. So far, I don't have any 1099-NEC's this year. I should have at least 10.

As someone pointed out on another thread--and this is a big one---When you are paid by an MSC via Pay Pal for a shop you did at Burger King....you get a single payment for the job fee, the bonus (if any) and the Whopper. That is reflected on the 1099-K from Pay Pal. On the 1099 NEC, all that has shown up in the past is the fee and the bonus.

So if you were to input the 1099K figure onto the 1040 Schedule C, you’re paying income taxes on the purchase of the Whopper. Its a good burger but it isn’t income.

LOL

Yes, this is called a flat shop fee. Well, sort of.

Edited 1 time(s). Last edit at 01/28/2025 02:40AM by Okie.

My best advice would be to keep good records yourself, tote up the totals of pay, bonuses, reimbursements and mileage plus other columns you want for each msc from your records (using an excel spread sheet makes it easy to sort your entries however you want. You can even sort it by entrees if you do a lot of food shops!) Then you can take a look at the 1099 you get to see if they are correct. I use my numbers when I do my taxes, not the numbers on a 1099. If the 1099 is way off see if it includes reimbursements. If it seems totally out of whack I would recommend contacting the msc that sent it to you to see why.

Yes! People with very simple tax returns can do their own tax returns.

I called them back tonight and asked about the 1099K. Got a totally different answer to some specific questions.

Then the first person I speak with says, "Let me let you talk to a Tax Expert....I'm a product expert." Oh boy. So the Tax Expert comes on and I give her the same scenario I mention above.

"A MSC sends me to Burger King and offers me a $5.00 fee to buy a Whopper and reimburses me $5.00 for the whopper.

So on PayPal, I get a payment for $10.00 reflected on my 1099K.
In the past the MSC would send me a 1099-NEC for $5.00 not listing the repayment. Is the $5.00 I spent on the Whopper taxable?"

The Tax Expert's answer is that the reimbursement isn't taxable AND that I had to list the $5.00 as a business expense. I had to go so I didn't get a chance to ask her the following questions...

"Do I list it even if I got reimbursed?"
"If the answer is "no" do I list the difference in what I paid and what I was reimbursed---if the Whopper costs $7.50 and I have a $2.50 that wasn't paid back to me".

That will be tomorrow's question.

metro25782, I'm just curious. Do you have to pay for these calls/advice?

@Okie wrote:

metro25782, I'm just curious. Do you have to pay for these calls/advice?

Yes. I'm using them this year. So far; not so good.

I think I've heard of this. There's also an option to pay extra money to have someone guarantee accuracy and represent you during a potential audit. Essentially signing off on the return. IMO, don't do it!

Well, I guess the support calls that already come with it, doesn't hurt anything.

@Okie wrote:

I think I've heard of this. There's also an option to pay extra money to have someone guarantee accuracy and represent you during a potential audit. Essentially signing off on the return. IMO, don't do it!

Well, I guess the support calls that already come with it, doesn't hurt anything.

Yeah, I didn't go in for letting someone else prepare it...they are just to give advice. Getting a "product expert" instead of a "tax expert" is pretty sh**ty.

From what I understand, one is more about troubleshooting the software, and the other is more about the preparation side. Tell the person what you want or expect. Some might not be the most technical in either area.

I filed mine today so far so good. One of the C-store owners I merchandise at helped me define my expenses subtract reimbursement. Tracked my miles but standard mileage deduction was better. Yes I received free tax advice. I make their displays look extra good so it’s a good trade off

This is how I figured it out. Using some fake numbers
Lets say the 1099K is S10,000
less the 1099NEC -$4000
Less $4500 reimbursements -$4500 These are not taxable. I keep a chart of what each shop pays in fees plus what is the reimbursable amount. So it was easy to figure out the reimbursable amount for each shop.

The 1099K I got from Paypal went straight to the trash. It's useless to me regarding me filing taxes. What counts is the 1099NEC I get from the MSC. The income on their 1099 will be fees only. If you earned $600 or more in fees from a MSC, they must provide a 1099. They will be mailed by the end of the month according to IRS rules. Companies who fail to provide a 1099 can face stiff fines.

However in past years some have said the 1099K they got from some ms companies included reimbursements. You really need to keep track on your own. Using just their numbers might cost you if they are wrong. You still need to have your own figures in case you are ever audited. So use those. I can defend my numbers, not theirs.
As for Turbo Tax they have several different levels. The first year I used Turbo Tax I was using the do it your self level which is the least expensive I routinely got a real tax expert when i called. But I was filing very late, around September so they were not that busy. The following years I did my taxes around the end of March beginning of April. That year I never got a tax expert. That level does not give you access to the tax experts officially but sometimes if they are not busy they answer the call. Since you called them early before most people have received all the data they need to file they are probably not too busy to talk to you now.

@sandyf - This is what has been discerned - The 1099K from PayPal includes all of it, fees and reimbursements. (All monies received from any MSC that paid through PayPal)

1099-K - the "K" indicates the monies you received were by a third party entity, in this case, PayPal. And PayPal records all that was paid, period.

1099-NEC (formerly known as 1099-MISC) - Received payment because you are self-employed or worked on a contract basis with no taxes withheld.

I would get that 1099K out of the trash. I am definitely reporting the 1099k along with all 1099NECs. I will just enter the 1099NECs as expenses on the schedule C and put something like "duplicate income reported on 1099NEC. The IRS gets a copy of your 1099K. I do not want to raise any red flags by not including it on my return.

[www.irs.gov]

If your path dictates you walk through hell, do it as though you own the place. -unknown

drdoggie00, may I prepare your taxes?

@1forum1 wrote:

The 1099K I got from Paypal went straight to the trash. It's useless to me regarding me filing taxes. What counts is the 1099NEC I get from the MSC. The income on their 1099 will be fees only. If you earned $600 or more in fees from a MSC, they must provide a 1099. They will be mailed by the end of the month according to IRS rules. Companies who fail to provide a 1099 can face stiff fines.

So you're saying that companies have to mail them to you as well, right?

@Metro....Yes....... don't know if the companies have to slow mail them to you, but they do have to provide them somehow.... mail, email, notification of availability on website.....

@Metro.... if you don't get one you need to contact them... could be an oversight... incorrect email..... mail lost

I got a 1099NEC from Presto. Nothing from PayPal yet. The one from Presto said they didn't separate the fees from the reimbursements. This was in an email separate from the form. .

Edited 1 time(s). Last edit at 01/29/2025 07:07PM by Belle.

Incorrect. 1099-NECs are sent for earnings $600+. If it includes reimbursements, then those shops were FLAT fees. You will still receive a 1099-K if your reach the threshhold for payments in excess of $5000+. Report your income once regardless and ignore the personal reimbursements on the 1099-K. If you kept excellent, precise records, this should be a snap. Note to others: Don not trash your 1099-Ks

@metro25782 wrote:

That can’t be right, right? I should still get a 1099-NEC from the MSC too, correct? Her advice was that if you get paid through PayPal, you won’t get the NEC. If you got paid via direct deposit, you would. Sounds weird since PayPal could be someone re-paying me for gasoline if I gave them a ride to work, a refund for something I returned that I bought through PP... Any thoughts?

P.S. Do not forget your Gift Cards received minus your required expenditures (in accordance with ordering requirements) and other expenses, LOL.

@Okie wrote:

drdoggie00, may I prepare your taxes?

Sorry, Okie, that's a boyfriend privilege. Service offered to help, but I turned him down because I didn't want him to see the state of my recordkeeping.

If your path dictates you walk through hell, do it as though you own the place. -unknown

drdoggie00, Just kidding. Don't flatter yourself!

I'm just glad that ServiceAward is still lurking around.

@drdoggie00 wrote:

@Okie wrote:

drdoggie00, may I prepare your taxes?
Sorry, Okie, that's a boyfriend privilege. Service offered to help, but I turned him down because I didn't want him to see the state of my recordkeeping.

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TurboTax Advisor Says No More 1099-NEC if You Get A 1099-K????

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