Who gets a 1099-K from PayPal?

Payment processing services, such as PayPal, are required to issue a 1099-K form to the IRS for reporting the sales of their customers (businesses) who receive more than $20,000 in a single year AND who conduct more than 200 transactions.

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Who is a payee?

A payee is a party in an exchange of goods or services who receives payment. The payer receives goods or services in return. The name of the payee is included in the bill of exchange and it usually refers to a natural person or an entity such as a business, trust, or custodian. What is a payments facilitator? A payment facilitator is a company that allows their customers to accept electronic payments using the payment facilitator's infrastructure.

One may also ask is ebay a third party settlement organization?

Form 1099-K is issued by third-party settlement organizations such as PayPal, Venmo, ebay, etc. The problem for all of us mousers (recall the definition of M.O.U.S.E. found in the November 15 blog) is what to do when our clients start receiving Form 1099-K. Thereof, what is considered unreported income? In unreported/underreported income cases the individual received more income than he or she reported on his or her return and/or the individual did not report all items of income on the return.

How do you fix unreported income?

File Old Returns and Amend Your Underreported Incom. In many instances of underreported income, the solution is as simple as filing an amendment to your most recent tax return. In these minor cases, you may not even need to hire a tax professional!