1099 Tax Question

[gorace7878]

looking for some assistance

does paypal dive into after the fact whether or not a personal payment is actually a personal payment?  and do they do that in terms of tax reporting?

[gorace7878]

for example if a person has 24000 in payments recieved into a paypal account and 4500 of that is paypal "friends and Family" payments which would bring the total for goods and services payments to 19500 which is clearly under that 20k threshhold. would they have any reason to look into the 4500 to make sure all of those are legitimate "friends and family payments"

[PayPal_Olivia]

Hi @gorace7878,

Thank you for posting in the community. That's a great question!

The threshold for reporting is when both of the following conditions are met:

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

Friends and family payments would not count toward those levels.

For more information, please take a look at this article, and click any of the links in it to expand that category to answer additional questions on the subject.

I hope this helps!

Olivia

[gorace7878]

what are the odds they send a 1099 out in error?  Like i stated i called Paypal many times and i am not OVER the threshold but anything can happen in terms of computers glitches and such. let me knwo if you have heard of any  being sent out in error

[Whac-A-Mole]

Paypal would not look into 4500 to see if there is any goods and services disguised as friend and family.

neither does it care.

But IRS does.

If you are ever audited,it wants to see your bank statement,anything that is not salary,insurance proceeds,inheritance,SS payments,tax refund,then it must be income and it wants a piece.