Last year I posted a few little stories about Form 1099-K, and suddenly people from all over the internet came out of the woodwork, e-mailing me with questions.
Some people wrote paragraph after paragraph after paragraph, telling me waaaayyyy too much information about their financial situation and asking me for help on what to do with the 1099-K that they received.
Examples of things random people e-mailed me include: “I’m on unemployment, will getting this 1099-K screw up my unemployment?”, or “those actually were my friend’s transactions; they just used my PayPal account so what should I do?”, and I even got one tax-protester-type argument of “I don’t have to report the 1099-K because it doesn’t have statutory force.”
Of course, none of those people intended to pay me to respond to their questions.
The whole experience of getting these types of e-mails made me regret ever posting anything about 1099-K! So I suppose I should just leave well enough alone. But for 2013, I feel obliged to wade into 1099-K territory and make one post in which I address Form 1099-K.
If you get a 1099-K, you can’t just ignore it.
The answer to “what do you do with the 1099-K” is: “it depends.”
If it relates to business income, it goes with all your other gross receipts on the appropriate line of your business return. If it’s hobby income, report it as hobby income. If it relates to things you’ve sold on-line, you might have Schedule D transactions.
If you’re unsure what to do, you should probably pay a professional to help you.