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Determining Paypal fees for taxes

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Ehab11
Contributor
Posted on

Im trying to figure out if there is an easy way to calculate what I paid in Paypal fees so that I may list that on my taxes. From everything I read , the 1099K is gross earnings and does not include the fees? Any help would be great. 

 

Thank you !

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Determining Paypal fees for taxes

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sharpiemarker
Esteemed Advisor

@Ehab11 

 

The 1099K doesn't include the fees? I thought PayPal uses the gross amount which includes everything, the amount the customer paid without all the expenses, fees, etc, taken out.

 

"$20,000 USD in gross payment volume from sales of goods or services in a single calendar year". "report gross payments received for sellers who receive over $20,000 in gross payment volume AND over 200 separate payments"

 

How is the $20,000 calculated?

 

Will it be calculated based on net or gross transaction earnings? As required by the rules, the $20,000 will be calculated by looking at a seller’s gross payment volume for sales of goods or services. Gross amount means that any adjustments for credits, cash equivalents, discounts, fees, refunded amounts or any other amounts will not be netted out. In addition, the reported amount will include any shipping and handling, sales tax or other fees which are included in payments you receive. We realize that these amounts may or may not be included in your taxable income, but we are required to report them. You should work with your tax advisor to determine how these items should be treated for tax purposes.

 

https://www.paypal.com/us/webapps/mpp/irs6050w

 

To net out your expenses, adjustments though:

 

Report > Activity Download

Select Transaction type, date range, customize report fields, and report format.

 

Open the CSV as a spreadsheet and tally the amounts.


Kudos & Solved are greatly appreciated. 🙂

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Solved

Determining Paypal fees for taxes

Options
Go to solution
sharpiemarker
Esteemed Advisor

@Ehab11 

 

The 1099K doesn't include the fees? I thought PayPal uses the gross amount which includes everything, the amount the customer paid without all the expenses, fees, etc, taken out.

 

"$20,000 USD in gross payment volume from sales of goods or services in a single calendar year". "report gross payments received for sellers who receive over $20,000 in gross payment volume AND over 200 separate payments"

 

How is the $20,000 calculated?

 

Will it be calculated based on net or gross transaction earnings? As required by the rules, the $20,000 will be calculated by looking at a seller’s gross payment volume for sales of goods or services. Gross amount means that any adjustments for credits, cash equivalents, discounts, fees, refunded amounts or any other amounts will not be netted out. In addition, the reported amount will include any shipping and handling, sales tax or other fees which are included in payments you receive. We realize that these amounts may or may not be included in your taxable income, but we are required to report them. You should work with your tax advisor to determine how these items should be treated for tax purposes.

 

https://www.paypal.com/us/webapps/mpp/irs6050w

 

To net out your expenses, adjustments though:

 

Report > Activity Download

Select Transaction type, date range, customize report fields, and report format.

 

Open the CSV as a spreadsheet and tally the amounts.


Kudos & Solved are greatly appreciated. 🙂

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