In Canada I had a similar problem with Istock. I claimed the income and then a month after taxes deadline Istock sent T5's with the statement of income.  I ignored it, but Rev Can adjusted not only my taxes but my husband's also and sent us invoices for overdue taxes and penalties.  All I had to do is phone (and sit on hold for half a day), print and complete a form (sorry Canadians, it was from another computer).   They explained that in future tax years, if this happens to include this form in with my package that I remit.

I know... different country.. different rules. But if Paypal sends the 1099's during your tax season, surely there must be a similar form from IRS that you complete and remit with your tax filing?  You really can't ignore forms like this, the gov always gets a duplicate and may work slowly - but you will surely hear from them.

I never gave them the info, and I don't depreciate anything, and I've had no issues.

http://www.payoneer.com/

istock, 123rf, Dreamstime, veer, deposit, Pond5, ... most sites offer already payoneer. If they do, it does not make much sense stick with a shady company like paypal.

How can a government charge you twice if you have proof you paid taxes. This is not a PayPal issue, PayPal is following the law. Our government is the issue here, in my opinion.

Makes sense, but still I dont think its a PayPal only thing.

This explains more https://blog.etsy.com/en/2012/the-paypal-1099-k-dont-fear-it/

I am guessing the IRS pressured Paypal into reporting this - still, a 1099 doesn't seem like the right way to do it. I would hope that just explaining that the reported income from wherever was paid through paypal would be enough for the IRS though.

...Repeating this part because it comes up over and over and some people don't understand you must have BOTH: PayPal will only submit 1099-K forms for those sellers that meet the BOTH 200 transactions and $20,000 income...

I think my new strategy is going to be to just stay under the reporting criteria and avoid these stupid forms altogether. There's not much I can do to stay under $20,000, but I certainly can stay under 200 transactions.

I'm moving some of my business over to Skrill, but apparently they do the same as PayPal, with the same 200/$20k criteria for IRS reporting.

Seriously considering switching to checks from some of the companies that allow that payment option. I don't care if I have to wait longer to get paid.

Maybe you didn't pass both qualifiers. And let me help. If you get a form, the IRS got a form.  They file electronically and have a mailing deadline of January 31st. It's not like the IRS gets a boatload of little scraps of paper to sort through. They get a database file, with your SS# and that's why the agencies and PayPal are so persnickety about ID and SS#s.

I worked for someone and the private contractor cutoff is $600, in other words I'd need to make $600 and one cent for them to be required to report.

Well the lady assured me that wouldn't so I work the three days and sure enough she reported it, so I had to pay taxes on the $600 which means - I would have made more, by only working two days! Talk about angry. I worked for nothing?

It doesn't matter what it says, it doesn't matter if people use it. I'm saying, include the 1099-K and stick a note on it, that it's not accurate and you are reporting all your income from the sources and their 1099s. Where the IRS gets twitchy is when people fail to report something.

They do not collect twice, like someone intimated. The IRS just wants to know that someone isn't making $20,000 from sources that don't report. eBay would be a good example. Also it's all sources, not just micro. You could be selling things on Craigslist, eBay, Amazon, plus Micro and maybe a contract that paid you on PayPal, they all count.

This isn't just about Microstock!

You should be in the resale business where I have to have tax exempt form from every customer, I have to send forms to many of them (even though I don't think I really need to) but because they pay me, I have to file that. Some send me 1099s, most don't. Total mess. I have to have a sellers permit, the EIDN and a tax exempt form for every one of my suppliers. Used to pay half the SS for employees and mandatory workmens comp. insurance.

I need to collect and file sales tax, by county for this state. There are numerous different rates, basic state, then some counties have an addition and for the stadium tax the adjoining counties get something and for the other stadium tax, those counties get a special added tax. 72 counties and every customer I need to know which taxes to charge and then... file that number for each appropriate county that they are in!

And other states are trying to get an internet tax, talk about That Sucks! I sell an antique toy on eBay and NY wants to get taxes on that. I ship to Colorado and they want a bite. Can you imagine trying to keep records and collecting for all of the states? Impossible and invasive.

So one little 1099-K from PayPal is hardly some big issue.

Quote from: Uncle Pete on September 16, 2014, 11:57

File it with your taxes, and ignore the income. But people can't just ignore the form because they don't like it.

I would say the problem is that they don't seem to report everything on it. So, it was less than my total income reported, but more than my stock income. What they are putting in or leaving out would probably take hours, days or more to resolve. I'm also not entirely sure where or if it is supposed inserted onto the tax form. Luckily, mine arrived after my taxes last year and they didn't send me one this year. Maybe, they have eliminated the practice of sending them out or just send them to the IRS.

Yes, it's more of a nuisance than anything else. I'd just report it as duplication of other 1099 earnings.

Back to what I said in the first post. Ask An accountant. There's also an IRS help line and I'm sure that NOW would be a great time to write an email question, not in April. LOL

Quote from: Uncle Pete on September 16, 2014, 13:46

So one little 1099-K from PayPal is hardly some big issue.

Actually, what you described is very similar to what it would take to decipher the 1099-K. Basically, going through Paypal one customer at a time to see if that bill was represented on it. Otherwise, you are really just ignoring it.

Uncle Pete made it very clear, yet people still throwing toys from the pram. 

Calling PayPal shady when it is not even a PayPal thing. Shady because they follow orders from the IRS, or shady because you can no longer be shady? 

No toys being throwed.  This guy had problem with revenue dept. Over confusing new tax law making paypal do 1099 for money already accounted for.  That don't happen to me but if it did I would be upset too.

I am not here to argue. Someone here called PayPal shady, which is an unfounded accusation. I didn't call you shady. My comment was more tongue in cheek than anything else.  I have read many sources saying the form is no issue, yet you insist it is. I really have nothing more to add. I am sorry it is causing you issues, I hope you find another way to get paid without the hassles.

If PayPal is shady for issuing a 1099-K then so is Skrill and all other payment service providers in the US...

Which other payment service providers issue 1099s? I'm not even sure that Skrill does. I can't find a single mention online of someone ever receiving a 1099 from Skrill.

...There is not one mention of a 1099-K procedure on the Skrill website. The only way to get this information was through their customer support...

Actually it's here: https://www.skrill.com/en-us/siteinformation/privacy-policy/

But again, I haven't been able to verify that they actually do report anything to the IRS or that anyone gets 1099s.

Any Skrill users here ever gotten the 1099-K form?