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Post by rockjunquie on Jan 24, 2024 19:30:25 GMT -5
This is messed up.
My granddaughter and son sometimes borrow money from me and pay me back through PP. My granddaughter sent me 500 for goods and services by mistake, which I promptly refunded. As such, I paid no fee and I received no money. My son sent me 101. Same thing- I refunded it. Now, I get a 1099k for 601.00. One dollar over the limit. Fine, but I never got that money, I refunded it and PayPal didn't make anything. Now, I have to report it and pay TAXES on it?? WTH?? I plan on calling later. I'm sure PP is swamped right now with angry customers. This is just flat out wrong.
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Post by rmf on Jan 24, 2024 22:39:49 GMT -5
don't you just love incompetence
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Post by rockjunquie on Jan 24, 2024 23:00:00 GMT -5
don't you just love incompetence Frustrating to say the least... |
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Post by stardiamond on Jan 25, 2024 0:59:27 GMT -5
The thresh hold for generating 1099k for 2023 is $20,000. A company may send one for less. Getting a 1099k doesn't mean you had income that requires paying taxes just requires additional documentation when you file.
If I loan you $25,000 through paypal and you repay the loan through paypal, we both get a 1099k for $25,000.
Is it taxable income, no
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Post by stardiamond on Jan 25, 2024 1:17:38 GMT -5
I went to Paypal and checked for a 1099k. They didn't create one. I received around $2,000 in paypal payments for merchandise sold in 2023. As of now, Etsy hasn't created a 1099K for 2023. The documentation on both sites says $600 but that was suspended. $600 kicks in 2025 but it is anticipated that congress will fix the mess before then.
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Post by Rockoonz on Jan 25, 2024 8:08:20 GMT -5
I think the existence of a 1099k does not mandate that you must file anything business related, even if the $601 were sales. Sales is not income, we had sales in 2023 last year as an extension of our hobby, and our business name is registered with AZ for sales tax on our one show we did, but when you add mileage, hobby related purchases, lodging and 1/2 of meal costs and so on it is certain that we had no taxable profit.
If we were operating as a business as opposed to a hobby by IRS rules we would need to file, and business losses could be deducted from total income. Since it is not a business, all I have to do is grab all the reciepts and mileage numbers, make up a basic profit/loss statement showing that reportable costs exceed sales, and toss it into the 2023 folder just in case the IRS decides to audit. This is what our tax preparer up North told us.
In your case somethin signed by your kids, along with something showing they ARE your kids, is sufficient. File it in your "just in case" IRS file folder and keep it for 5 or so years. The paypal CYA action is not your problem at all
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Post by Rockoonz on Jan 25, 2024 8:15:29 GMT -5
Problem for me is Square. I set it up before the Mesa show in 2023 and never used it there because their system was glitching big time. It worked for me in Oregon, and it looks like they deducted AZ sales tax from the transactions there, not even sure how they could have routed the money to AZ revenue, and no response to attempts to call or chats sent to Square. I need to contact AZ revenue and see if they got the money, if so I can hopefully reconcile it against what I owe from this years pitiful sales. I managed to turn off the tax collection on the Square dashboard, but what a mess.
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Post by HankRocks on Jan 25, 2024 10:07:59 GMT -5
Problem for me is Square. I set it up before the Mesa show in 2023 and never used it there because their system was glitching big time. It worked for me in Oregon, and it looks like they deducted AZ sales tax from the transactions there, not even sure how they could have routed the money to AZ revenue, and no response to attempts to call or chats sent to Square. I need to contact AZ revenue and see if they got the money, if so I can hopefully reconcile it against what I owe from this years pitiful sales. I managed to turn off the tax collection on the Square dashboard, but what a mess. If it's like my Square, I have only done Shows in the Houston area so the Sales Tax rate is set and not changed by me. If I were to go somewhere with a different rate I would have to set that rate up and then set it to that rate for those different Sales Tax sales. Square does not know where the sales are made and you need to adjust per the local rates. Square does not send money in. I get a quarterly statement from the State Tax folks that I am required to fill out and report any sales and Sales Tax generated and send that amount in to the State. Square does nice reports on how much in Sales I made and the tax generated per the rate I set. Of course that's only Credit Card/Debit Card sale. Cash sales are up to you to keep track of. I track my sales pretty closely and doing the Quarterly reports to the State is not too difficult for me. Usually I do a cash count and use the Square report of Credit Sales and cash to come up with my total to report for a given Show. I like to track sales so I get a good number on what is selling well and what's not. |
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Post by rockjunquie on Mar 7, 2024 16:36:36 GMT -5
Well, I waited to call them until it might not be too busy and I got straight through to PP. The lady spoke good enough English. She found in my record where no money changed hands. BUT, they can't do anything about it. The solution was for me to have my tax professional contact them. We're talking about 601 dollars. Seeing a tax pro would cost more than the taxes I would have to pay. So, guess who is going to hand the Government money for NOTHING?? I'm so pissed.
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Post by aDave on Mar 7, 2024 18:30:59 GMT -5
Well, I waited to call them until it might not be too busy and I got straight through to PP. The lady spoke good enough English. She found in my record where no money changed hands. BUT, they can't do anything about it. The solution was for me to have my tax professional contact them. We're talking about 601 dollars. Seeing a tax pro would cost more than the taxes I would have to pay. So, guess who is going to hand the Government money for NOTHING?? I'm so pissed. Take a look at this link. It appears to have info in the article about what to do if the 1099K is incorrect. Hope this is helpful. www.paypal.com/us/cshelp/article/help546 |
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Post by stardiamond on Mar 11, 2024 18:52:14 GMT -5
For $600, I would submit a schedule c with an explanation regarding the 1099k. The IRS knows the 1099k is a mess and they will likely adjust your return. Best case you don't owe the amount from the 1099k, worst case you do but it isn't reasonable. www.wikihow.com/Report-1099-K-Income-on-Tax-ReturnI have a story for you. My adult son lives with me and is unable to have a job. He has a good friend who has a sports betting business, aka bookie. I don't know if he is licensed or not. He had my son produce spreadsheets for gamblers who had accounts. He also had payments and disbursements done through his Paypal account. It was in tens of thousands of dollars. He did not receive a 1099k from Paypal. I expect it was how the transactions were coded when Paypal was used. All transactions were coded friends and family. |
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Post by susand24224 on Apr 3, 2024 15:14:32 GMT -5
Well, I waited to call them until it might not be too busy and I got straight through to PP. The lady spoke good enough English. She found in my record where no money changed hands. BUT, they can't do anything about it. The solution was for me to have my tax professional contact them. We're talking about 601 dollars. Seeing a tax pro would cost more than the taxes I would have to pay. So, guess who is going to hand the Government money for NOTHING?? I'm so pissed. Take a look at this link. It appears to have info in the article about what to do if the 1099K is incorrect. Hope this is helpful. www.paypal.com/us/cshelp/article/help546You don't need to do all that work. If you want to be ultra careful, put it on your taxes then fill out Schedule C (it's not hard). I'm not looking at Schedule C right now, and don't recall if there is a specific place for refunds, but if there's not, just write it in under "other." |
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Post by rockjunquie on Apr 4, 2024 9:58:49 GMT -5
You don't need to do all that work. If you want to be ultra careful, put it on your taxes then fill out Schedule C (it's not hard). I'm not looking at Schedule C right now, and don't recall if there is a specific place for refunds, but if there's not, just write it in under "other." Thanks Susan. I hope H&R Block online can handle it. |
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Post by susand24224 on Apr 4, 2024 15:11:18 GMT -5
You don't need to do all that work. If you want to be ultra careful, put it on your taxes then fill out Schedule C (it's not hard). I'm not looking at Schedule C right now, and don't recall if there is a specific place for refunds, but if there's not, just write it in under "other." Thanks Susan. I hope H&R Block online can handle it. What I would do is simply ignore it and do nothing, but keep the documentation where the money was sent and also returned. The IRS *might* send you a letter asking for clarification, at which point you can send a letter and your documentation. They certainly aren't going to audit you over $601. At worst, they would send you one of their infamous letters saying you owe the taxes on $601. At that point, you have a right to challenge their assessment and send your documentation. Either of these scenarios is unlikely, but possible--it simply isn't worth their time--but it could happen. The Schedule C stuff is for *only* if the above two scenarios are more than you want to deal with. |
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