Paypal Changes for 2022

@thyname This is getting even more confusing. The simple fact that you received a 1099 when you don't have a business throws a monkey wrench into the whole tax filing process. There are good links above that indicate that getting a 1099 from Paypal should not happen if you don't have a business. But you got one and now you've got to figure out what to do with it.

It is my understanding that you can't just ignore a 1099. If your return doesn't account for it somewhere then you will get a notice from the IRS that you have a problem with your return. Schedule C is the only place I know of to account for a 1099. I do consulting and I've received many 1099s. Schedule C is where you account for your expenses against the 1099 income. It is not set up to account for the sale of personal items if you have no business. The problem is that I don't know of any other form that deals with 1099s.

I searched using multiple criteria and I found several articles saying that the Paypal 1099 is not intended for the casual sale of household goods but I could not find anything that described how to account for it on your return if it only includes the sale of household items.

Too bad we don't have a CPA in the group who would generously provide us free advice. In the absence of that I think you'll have to go to a CPA for an answer. When you get this figured out please let us know.

Everyone receiving a PayPal payment that is NOT family & friends will get a 1099-k tax form, if above the dollar limit. Business or not.

I do my own taxes using TurboTax. Including last year when I had the 1099-K from PayPal. I reported the PayPal form on Schedule D of form 1040, accompanied by a detailed Form 8949 that I mailed over, which I reported on form 8453 of my electronic tax return. That's the best I could do based on the information I had gathered. I printed all the receipts (buy and sell, shipping, etc. etc.) and I am keeping them just in case of an audit. 

I did contact a few CPAs I knew, but they had no answer. They were looking things up in the Internet, no different than me. Not all CPAs know what to do. I guess I am just unlucky to not know a good CPA.

That's all I have to offer. I will stop it right here. If anyone has a better idea I am all ears. I will keep an eye in the subject matter, needless to say. But I have nothing left to contribute. Good luck everyone 

Yes this a confusing topic.  Question to the CPA's.  If I sell an item at a loss over the threshold, do I need to even file the 1099-K.  If I don't need to file the 1099-K, do I need to keep documentation and in what form would that documentation take.

If you go into your Audiogon account, click on the BUYING link, then click on the BOUGHT tab you will find the equipment you bought on Audiogon, the price you paid and the date you purchased it.

You can do the same thing for items you sell.

It will take a while to sort out exactly what this new 1099 means for individuals. In the meantime, stay cool and save documentation for purchases and sales.

I pay $450,000 tax on my boat few year ago. Some guy get away with less because they take guy out and call it charter business. I no skirt tax. If people make money here and it business pay tax or don’t sell or be like liberal and make excuse that category no fit way you like and pay people argue. I proponent flat sale tax but I no political leader. I know how tax work just system efficiency like thiel and complicate as system that make Bad recording sound good. Kdl system.