Regarding a 1099k that I received from PayPal
I created a fundraiser through kofi.com for a friend and used my PayPal to received the money.
All of the money was recorded as payments and not donations.
Is there anything I can do to change the status of those payments or do I have to record the intended donations as income?
Answers
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Hi smarky28!
Great question!
Most personal transactions shouldn't show up on a 1099-K and most personal transactions aren't taxable and shouldn't be reported on a 1099-K. It sounds like this is what happened with Paypal. Unfortunately, this means that the IRS will be expecting that 1099-K to be reported on your tax return.
For your situation, you have a couple of options.
-You can request an updated 1099-K from Paypal showing only personal transactions, and not business transactions.
-If the issuer of your 1099-K will not correct the form (I highly doubt Paypal will), you can report this in your account by going to Income > Business Income > 1099-K Income. At the bottom of that page, answer "yes" to the question asking, "Did you receive a 1099-K that's incorrect?"You'll want to answer 'yes' to the question on the next page denoting that your 1099-K was from personal transactions. Then 'no' to the questions on the following page about the transactions being sold for a gain or a loss.
After you go through these screens, the income will show up on your tax return as income on the first page, but then will be removed as "incorrect 1099-K" later on in the return.
If you have any other questions, please let us know. Or, if you would like specific answers based on your entries, you can send a support message through your support center while signed in to your account.
