I received an email this morning from Swagbucks saying that the payment I requested weeks ago is being delayed because of issues with the network. The email got my blood boiling again. Last week I was issued a PayPal 1099-K for a bunch of things that were not worthy. There are things that aren't business income. I need to get paperwork on to prove they weren't actually making money. I need to prove that the spending is not taxed. What a mess! I feel like we need to prove our innocence in this situation because we are saddled with guilt.
This is not tax advice and I need to say so. I am not giving any actual advice here.
I wanted to give an update on the post about the 1099 K I received from PayPal this year for items that were not business income. They just sent out a corrected form to me, as well as some others, that changed the form to $0. It was good to see them make it right since my accountant had already wrapped up my stuff and had to go back and adjust.
I think a PayPal 1099-K is not a big deal to most tax professionals once I get the required paperwork together. It could be a different story for someone who does their own taxes. It doesn't account for the fact that I need to gather a lot of paperwork to prove that I don't have to pay taxes on it. Will showing that a whole bunch of income is not actually income will lead to an audit? Time will tell.
I am avoiding both of them because of all of this. The juice is not worth the squeeze. Is it worth the headaches at tax time to use PayPal? Amazon gift cards are like cash to me, so I could take them from Swagbucks. I will take a paper check to see if it is possible for some of the other options. I'll do that if a bank transfer is an option. I will take any route that doesn't involve payment methods. I don't need more paperwork for stuff that shouldn't require it.
This isn't a big deal for most of the country for the tax season in 2021. For the tax year of 2021, the requirements are $20,000 or 200 transactions. Most people don't get to that level. What about in 2022, where the requirement is less than $600?
Sell some old stuff on eBay and you will get that 1099-K. Did you deposit $500 into a sports betting app and then withdraw it all when you won $200? Here is a $700 1099-K from PayPal. Are you saying you only won $200? Doesn't matter! Get the paperwork together. Would you be interested in participating in a program that allows you to buy products at a steep discount? You get a thanks for participating in the program with the payment processor.
A large portion of the population will be receiving these things in their email next year. It isn't hard for most to rack up $600 in activity that is worthy.
For all of those reasons, plus PayPal’s lackluster customer service and overcharging, I am moving on. I’ll still use PayPal and Venmo from time to time if a friend needs to use it to pay me. But, for cashing out from a program? Nope! I will be avoiding that PayPal 1099-K at all costs in 2022 and beyond. PayPal, you are the weakest link, GOODBYE!
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