PayPal reporting earnings in 2023

[EMS83]

After receiving the email about PayPal sending out an earnings report for each tax year, I wonder how will PayPal tell the difference between what are actually earnings and other funds received (in my case, child support).  Will PayPal only include the amounts I've invoiced on its report?

Thanks for any help!

[sharpiemarker · Accepted solution]

@EMS83 

PayPal likely use payment type (ie. friends and family, goods and services) the sender chose when paying and of course, payments received using PayPal’s business/selling tools will always be considered goods and services.

You should still go over them to double check because senders can forget to choose the correct payment type sometimes, consulting a tax advisor how to reconcile them on your tax return for transactions that were classified as goods and services but really are friends and family.

At least it will become easier/more organized to a certain extent since PayPal updated their policies effective Sept of last year so that business accounts can’t receive personal payments anymore.