Deez_Brickz Posted October 13, 2014 Share Posted October 13, 2014 Hello - I need some help from folks that are experienced with receiving the 1099k from Paypal. This will be my first year that I receive one. I have been able to keep track of my income/expenses before through the applications on eBay (they tell you selling income, selling fee, shipping charge). My concern with the 1099k is that I have heard different things about what PayPal counts as gross income/payments received. When I look at my Financial Statement online from Paypal it lists many different categories. Does anyone have experience with which of those categories are used to generate the income number that is reported on the 1099k? Specifically, I am looking at "Transfers to PayPal" account and "Other" . Do those get included as income reported? I think that some of the money in the transfers category includes things that I bought with bill me later/paypal credit and took advantage of financing offers. So it is really money that I spent but it shows up as a transfer in! I am assuming that the following line items are included in the gross income reported number: Payments received, Refunded fees*, Dispute reimbursements, Refunds received. Does anyone know for certain what categories are included? I dont even know how they got the "other" $$$ number, and it is large enough that I don't what to just write it off as "other" thanks! Quote Link to comment Share on other sites More sharing options...
asharerin Posted October 13, 2014 Share Posted October 13, 2014 Go to paypal and download the annual financial summary under "reports". On the summary scroll down to "sales activity" and under that you will see "payments received". Payments received is what will be printed on the 1099k if you meet the thresholds to receive one. Quote Link to comment Share on other sites More sharing options...
justafrog Posted October 13, 2014 Share Posted October 13, 2014 PayPal will include all your incoming money to that account on the 1099K. You need separate bookkeeping to keep track of your expenses against that income (postage, unless you do it all through PayPal in which case you can use their number; supplies; cost of goods sold, etc.) If you are not familiar with basic bookkeeping, learn or hire someone to do it for you. Either way, don't rely on PayPal or eBay raw numbers, they leave out far too much and aren't presented in a useful format for you. Quote Link to comment Share on other sites More sharing options...
Deez_Brickz Posted October 13, 2014 Author Share Posted October 13, 2014 Go to paypal and download the annual financial summary under "reports". On the summary scroll down to "sales activity" and under that you will see "payments received". Payments received is what will be printed on the 1099k if you meet the thresholds to receive one. Got it. Are you sure that they don't include refunds in the total? I have seen some folks on here before stating that refunds are also included. Although "Payments received" makes the most sense to me. Quote Link to comment Share on other sites More sharing options...
asharerin Posted October 13, 2014 Share Posted October 13, 2014 Got it. Are you sure that they don't include refunds in the total? I have seen some folks on here before stating that refunds are also included. Although "Payments received" makes the most sense to me. Nothing else is included except the total listed as "payments received" under "sales activity". Refunds from purchases, gift payments, bank transfers etc are not reported. 1 Quote Link to comment Share on other sites More sharing options...
Deez_Brickz Posted October 13, 2014 Author Share Posted October 13, 2014 PayPal will include all your incoming money to that account on the 1099K. You need separate bookkeeping to keep track of your expenses against that income (postage, unless you do it all through PayPal in which case you can use their number; supplies; cost of goods sold, etc.) If you are not familiar with basic bookkeeping, learn or hire someone to do it for you. Either way, don't rely on PayPal or eBay raw numbers, they leave out far too much and aren't presented in a useful format for you. Yes - I understand all of that. I have good tracking of my expenses. I was just looking for clarity on what categories on the statement that PayPal counts as all the "income" that they report. I don;t want to have to explain the other and transfers category because I can't get my numbers to match. What categories define "incoming money" for paypal? Quote Link to comment Share on other sites More sharing options...
Deez_Brickz Posted October 13, 2014 Author Share Posted October 13, 2014 Nothing else is included except the total listed as "payments received" under "sales activity". Refunds from purchases, gift payments, bank transfers etc are not reported. Thanks! I can work with that easily! Quote Link to comment Share on other sites More sharing options...
Sauromosis Posted October 13, 2014 Share Posted October 13, 2014 How in the world will I show my cost basis on this stuff? I guess print out every online retailer's activity, ebay purchases, etc. Does Paypal history of payments sent to a craigslist recipient constitute proof? How do I show cash paid to an individual I met up with? How do I show that I paid 400 dollars for a lot and sold one set for 120? Sorry for the rambling on. Quote Link to comment Share on other sites More sharing options...
justafrog Posted October 13, 2014 Share Posted October 13, 2014 How in the world will I show my cost basis on this stuff? I guess print out every online retailer's activity, ebay purchases, etc. Does Paypal history of payments sent to a craigslist recipient constitute proof? How do I show cash paid to an individual I met up with? How do I show that I paid 400 dollars for a lot and sold one set for 120? Sorry for the rambling on. Document everything. For Craigslist purchases, print out the ad, make notes on it as to date and time you met the person, where, what your mileage was, how much you paid in cash. If you can show cash withdrawals from your bank account in amounts that make sense against those purchases, that also helps. The IRS isn't unfamiliar with online or cash businesses - keep good records and if your documentation looks reasonable and is in good detail, they'll allow it. There are several ways to track cost of goods sold or cost basis -- if you're not familiar with them, talk to your accountant and/or hire a bookkeeper or take a bookkeeping class. There are expenses to running a business, and professional help or education so that you can learn to do it yourself, or hiring a professional to do it for you, are among these. 2 Quote Link to comment Share on other sites More sharing options...
asharerin Posted October 13, 2014 Share Posted October 13, 2014 We always have a mountain of receipts at the end of every week. We use shoeboxed.com and let them deal with it all. For $30 a month I just ship them all my documents in their prepaid envelopes, they scan and organize everything for us and then we have them shred everything although you can ask them to mail it back if you want. I highly recommend them. 2 Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.