1099-K from PayPal (tax form)

Thanks to all who posted very informative.  Also I'm amazed that there is not a "cost basis" associated with this "income" in the IRS doc.  Jeez.

I too used TurboTax for years until it got too complicated, my taxes that is.
Best thing is get a local CPA and do some tax planning as well, pays for itself.  

@audio2design
Let me rephrase that as "income range"

In addition to the OP problem, PayPal reported all my proceeds even transactions that were immediately canceled and refunded before any merchandise changed hands. This has the effect of overstating my taxable income by $7,000. I have been trying to get PayPal to send me a corrected 1099.

My advice is if you get a 1099 from PayPal, check it carefully to make sure they aren't overstating your income.

PayPal just stomped a very large sale over the holidays because it was "over my recent sales pricing." Guess they forgot the 5 figure sales per transaction - reported the income -  done with Japan and Eastern Europe for 10 years. Never had an unhappy customer. Now they want me to prove who I am and a lot more. Guess I am being ’disappeared.’ Flame off.

I think PayPal is under the gun because of cryptocurrency transactions as well as the $5k money laundering limit. I think ETSY, etc. has something to do with it - craft hobby and artisan businesses - who reports that stuff? I’ve met couples who have been making a great living making ’artisan’ items for decades and have never declared a dime in income.

My advice is to get a good accountant. You’ll get back more than his/her fee.

The only time I was ever audited was when I did my taxes with Intuit. If the ’accountant’ you find uses it, run.

PS
Does anyone know of a good alternative to PP?

As a CPA part of my job with the large companies I worked for was to be the liaison to the IRS when the IRS audited us. In fact, most large companies such as mine had established permanent office space in our building for the IRS as each tax year is normally subject to IRS audit.

It has been my experience that the IRS is a very reasonable group of people. In fact most I met are really great people, audiophiles, hunters, our neighbors In more years than I will mention I never met one out to screw anyone. If you can verify that the numbers you have put on your tax return are correct, they will accept it. In fact, an IRS agent that can be shown to be acting incorrectly will most often be disciplined and likely terminated.

Bottom line, if you can show in the event of an audit that the amount of taxable income you have on your tax return is correct, you will prevail.

Now I am only talking about us hobbyist selling our personal audit gear, the problem is the 1099K is only showing the IRS how much money you sold your items for. But the IRS only wants you to pay tax on any profit, the excess of sales price less selling expenses over your cost. The BIG PROBLEM I would have in this case is finding the invoices showing what I paid for the equipment to prove I did not make a profit on it. I don’t think I could for a lot if not most of my older gear.