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March 9, 2022
Question

What Type of Income is PayPal considered?

  • March 9, 2022
  • 1 reply
  • 0 views
For Types of Income when I didn't make enough to receive a 1099-K - what type of income is PayPal and Square and Cashapp? In addition to listing Cash and Checks as Types of Income do I list Square and PayPal and Cashapp separately or do I lump P2P payments in as one and in that case do I refer to them as P2P Payments or what do I call them?

1 reply

ColeenD3
March 9, 2022

It depends upon the reason you got the money. Is it a business; are you trying to make a profit? Are you selling old things lying around the house? Is it a hobby? If all the payments are treated the same way, lump them together. It doesn't matter that you didn't get a 1099. It is still reportable income.

 

If it's a hobby, report it as other income. You can't deduct hobby expenses.

If it's a business, report it on Schedule C.

If it is just old stuff from around the house, follow the steps outlined by @PattiF:

This can be reported as the sale of items not associated with a business so this won't be considered as self-employment income

 

In order to do that you can either report it as investment income or other miscellaneous income. Make sure to include expenses of the sales and the original cost of the items.

 

For reporting Form 1009-K for personal items sold not associated with a trade or business, you can report this as Miscellaneous income.

 

  • From the left menu, go to Federal and select the first tab, Wages & Income
  • Add more income by scrolling down to the last option, Less Common Income, and Show more
  • Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start
  • Choose the last option, Other reportable income and Start and Yes
  • Enter the applicable description and amount and Continue
    • First, enter Form 1099-K as received. It is essential that the full amount be entered.
    • Next, enter an adjustment as a negative number to reflect the cost of these items and the sales expenses  (but not more than the sales price. You can't produce a loss.)