Received 1099 ... Totals Don't Match Statements

[naylor]

I recived a 1099 form for 2015's sales.  I understand that PayPal only includes goods/services payments in your total, when calculating your income.  But the monthly totals on my 1099 are inflated by quite a bit.  When I take each individual month and add up every good/services transaction from my PayPal monthly statements, every month is less than the amount that PayPal has turnined into the IRS.  As I understand it, this should not be the case ... and I feel that I am now going to be paying taxes on a significant amount of reported income that is not accurate.  

What could cause this?  I really want to understand how this was calculated.  The totals do not include friend/family payments, as the totals still do not match when I include those.  But they seem to include all of my good/services, plus something else that is driving my totals higher than they should be.  This is perplexing, because I was well under the $20k threshold of good/services for the year, and did not expect to receive a 1099 form.

Any light that can be shed on this would be GREATLY appreciated.  Thank you!

[naylor]

I've spent most of the afternoon comparing monthly/annual financial reports, monthly statements, drilling into these reports where applicable, and trying to tie out these numbers.  Neither the stated totals on my financial reports, nor my manually calculated totals, match the income that is stated on my 1099.  I tried this for each individual month, and I also tried it both with friends/family payments included and excluded from the totals.  The total on my 1099 seems to be overstated by several thousand dollars, when compared to any of my other PayPal reports (or my personal records).  

[DPCreations]

Did you have any refunds?

The 1099 will include all REVENUE, gross amount

[naylor]

Thank you for this suggestion.  I believe I only had a handfull of small reufnds over the course of the year, but I'll revisit this when I dig back into my records this week.  I'm sure that's contributing to some of the descrepancies I'm seeing.

It really appears as though some (not all) of my friends/family payments are being included in my 1099 toatals, which should only include my good/services payments.  I don't know why that would be, or how I can determine exactly which transactions are being included.  That's why I began digging itno my financial statements and trying to get the numbers to tie out. 

Many thanks!

[lindatea]

Where did you find your 1099? I cannot locate mine anywhere. Also, does anyone know what year Paypal started providing 1099's?

Thank you!

[naylor]

Yeah, it was tough to find, based on the instructions they gave.  Here's where I finally found it:

Go to the ACTIVITY tab. Choose 2015 ALL ACTIVITY from the drop-downs. Then click STATEMENTS on the right-hand side of the page, and choose TAX DOCUMENTS.

I believe the 1099 form began in 2012, to answer your other question.

[madkiwi]

Not only does Paypal include the amounts that may have been refunded later (including cancelled transactions that you never received) your 1099 is the gross receipts- so it includes Paypal fees and any shipping that is part of your invoices.

You are expected to show the IRS your total sales including the Paypal fees, then deduct the fees as part of your business expenses.

So make sure to add that in when you are totalling your figures.

[starz3j]

Hi Read you rpost and my statements didnt add up, month of Dec I made $262  but on the 1099 it says I made $468 so they just add it all in then, Thats a RIP OFF, so I know I made around $12,000 this year BUT my 1099 is saying I made $23,000, this is just not right

[DPCreations]

It's not about how much you made, buy how much your received in gross receipts.  

How much you "made" is what you calculate for schedule C with your revenue/gross receipts and business expenses.

Whether you receive a 1099k or not, your gross receipts are all business revenue and should be maintained in your own busienss account.

[hdn4thebeach]

I am having the same problem to the tune of $12K higher than what I recorded. I guess I will have to call Pay Pal to see what is up. I really can't see how it could be that much higher. Can anyone add light to this issue or did Pay Pall have an issue when creating the 1099's? I understand you can disbute the amount some how, will have to look into it.