1099-K from PayPal (tax form)

First: I am not an accountant! or a lawyer, so please don’t consider this tax or legal advice:

How does PayPal report my sales to the IRS? Will I receive a tax Form 1099-K?

PayPal will track the payment volume of your account to check whether your payment volume exceeds both of these levels in a calendar year:

• $20,000 USD in gross payment volume from sales of goods or services in a single calendar year
• 200 payments for goods or services in the same year

https://www.paypal.com/us/smarthelp/article/how-does-paypal-report-my-sales-to-the-irs-will-i-receiv...

They should only do this IF you both exceeded $20K and over 200 transactions.

Question: Do you use Ebay/Paypal for non-audio stuff? Did you use the same account for both? That would of course be a no-no. Never mix business with pleasure.  Possibly if you have the same name and address on two different accounts they treat them the same.

If you didn’t do the above, it would seem to me that you should contact Paypal and find out what’s up.


Be careful you never charge taxes for personal sales either. If you did, that would also be an issue if you charged and collected sales tax.

Another potential issue to investigate as a guess is if you sold to a dealer, and not to an individual. They would be reporting their purchase as an expense, and perhaps Paypal mistakenly always generates a 1099-K if you sell to a commercial customer. Clutching at straws, but trying to give you things to investigate.

I would call PayPal and be very stern with them. It appears they have falsely issued the 1099 and they need to riscind it otherwise it will cause you no end of paperwork pain. This is there mistake and they need to fix it. I suspect you will need to elevate this probably up a few levels.

As noted the IRS now possibly thinks this is income and you are looking at big numbers when all your stuff is mixed.

PayPal appears to be covering their asses by screwing you. It is over 20K and 200 transactions. One could even say they are violating your confidentiality as they appear to have no legal reason to report this data.

Please read this and check your state laws:.  "Sellers in Two States Shocked by PayPal Tax Notice" https://www.ecommercebytes.com/C/blog/blog.pl?/comments/2018/2/1517955236.html/2/20

If you sold over 200 items that probably was not just hobby stuff. Talk to PayPal unless you have already deduced what you did.

Forget this notion of "tax brackets". With very few exceptions, taxation is incremental. I.e. earning a bit more does not mean everything else if taxed more. Only that extra you earned is taxed at a higher rate than everything else. This is not a new concept.

Not only legal, but it has pretty much always been this way, the only difference is in the past, the government has not had the means to track and collect. Now effectively they do.  Most states have had taxes on used cars, boats, etc., anything where a transfer of ownership has to happen and can be tracked.

I have to agree with Jetter. Never had an issue dealing with anyone from the IRS. If you are nice to them and honest, you get the same treatment back. I am sure there are bad apples, power can do that, but not my experience yet.