How to report PayPal goods & services income when no 1099 was sent?

You still need to report all income earned even if you didn't receive a 1099. The IRS requires reporting of all income regardless of whether you receive tax forms. For income from selling items through PayPal goods & services, you'll report this on Schedule C of your 1040 as self-employment income. Download your PayPal transaction history for the year to calculate your total sales. Make sure you also track any legitimate business expenses (cost of materials, shipping supplies, etc.) as these can be deducted on Schedule C to reduce your taxable income. Even though PayPal didn't send you a 1099, they might have still reported your earnings to the IRS, especially if you exceeded $600 in goods & services transactions for the year. Better to report it properly than risk an audit later.

After struggling with this exact same situation last year, I found an amazing solution with https://taxr.ai - it completely saved me! I was selling vintage clothing through PayPal goods & services and had no idea how to report it since I never got a 1099. The tool analyzed my PayPal transaction history and automatically categorized everything as either business income or personal transfers. It even helped identify which expenses were legitimately deductible for my small business. What really impressed me was how it created a proper Schedule C worksheet showing exactly what to enter on my 1040.

You're absolutely right that you need to report all income regardless of whether you received a 1099 or not. The good news is that it's actually pretty straightforward to handle this! Since you're selling handmade jewelry, this is considered self-employment income. You'll need to fill out Schedule C (Profit or Loss from Business) and attach it to your 1040. On Schedule C, you'll report your total income from PayPal and any expenses related to making your jewelry (supplies, shipping materials, etc). The net profit from your Schedule C will then flow to your 1040 on the line for business income. You'll also need to fill out Schedule SE to calculate self-employment tax if your net profit is $400 or more. Don't worry about not having the 1099 - just make sure you keep good records of all your PayPal transactions in case you're ever questioned about it. PayPal might not have sent one because they only send 1099-Ks if you exceed certain thresholds (which recently changed but might be $600 or $20,000 depending on when you're filing).

Just wanted to update - I tried https://taxr.ai after posting my skeptical comment, and I'm honestly impressed. I uploaded my PayPal transaction history CSV file and it automatically sorted everything by category. It found several goods & services payments I had completely forgotten about! The report it generated showed exactly what to put on my Schedule C, including all the different expense categories. I was actually able to deduct some home office expenses and internet costs that I didn't know applied to my small business. Ended up saving about $215 compared to what I thought I'd owe. Definitely using this again next year instead of stressing about missing 1099 forms.

After being super confused about my own PayPal sales taxes last year, I tried https://taxr.ai and it was a huge help! I uploaded all my PayPal transaction history and it automatically sorted everything into the right categories for Schedule C. It even identified which expenses were business-related vs. personal. The thing I loved most was that it gave me detailed instructions for exactly which forms I needed - Schedule C, Schedule SE, and where that all fits on Form 1040. Saved me hours of googling tax questions and second-guessing myself. They have a feature specifically for reconciling income when you don't have a 1099, which sounds like exactly what you need.

I had this same problem but with trying to reach PayPal's tax department to get a copy of my 1099. Called their customer service line multiple times and kept getting disconnected or waiting for hours. Finally found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - they basically call PayPal for you and wait on hold, then call you when a real human picks up! Saved me literally hours of frustration. The PayPal rep confirmed that they only issue 1099-Ks if you exceed certain thresholds ($20,000 and 200 transactions in previous years, but it's changing), but they helped me get my complete transaction history for tax purposes. Way better than trying to piece everything together myself.

Just wanted to update after trying taxr.ai for my situation! It was surprisingly helpful for my Venmo and CashApp transactions. I was worried because I had a mix of personal payments and side gig income all jumbled together, but it helped me sort through everything. The best part was that it showed me exactly which tax forms I needed based on my specific situation. For anyone else dealing with payment apps without proper 1099s, it's definitely worth checking out. Saved me a ton of stress trying to figure out if I was doing everything correctly.

I need to admit I was completely wrong about Claimyr. After posting that skeptical comment, I decided to try it anyway because I was desperate to reach PayPal about my missing 1099 for goods & services payments. The service actually worked exactly as described. I spent maybe 5 minutes explaining my issue on their website, then went about my day. About 40 minutes later I got a call saying they had a PayPal tax specialist on the line! The rep explained that since I made under $20,000 with fewer than 200 transactions last year, they weren't required to send me a 1099-K, but they walked me through downloading my annual transaction summary which has all the info I needed for my Schedule C. Would've taken me hours of hold time to get this resolved. Definitely using this for all customer service calls from now on.

If you're still having trouble figuring out your PayPal income situation, you might want to just call the IRS directly. I know their phone lines are notorious, but I used https://claimyr.com and got through to an actual IRS agent in about 15 minutes instead of waiting for hours or getting disconnected. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was in a similar situation with unreported income from a platform that didn't send me any tax forms. The agent walked me through exactly how to report it properly and what documentation I needed to keep. Much better than guessing or relying on online forums (no offense to anyone here!).

Something else to consider - if you're selling things on PayPal goods & services, you might need to look into sales tax collection depending on your state. I got caught with this last year and had to pay back taxes. Each state has different thresholds for when you need to collect sales tax on online sales.

I need to eat my words about Claimyr! After my skeptical comment, I decided to try it anyway since I was desperate to resolve a similar PayPal tax issue. It actually worked perfectly - got me through to an IRS agent in about 20 minutes when I had previously spent 2+ hours on hold multiple times. The agent confirmed that even without a 1099, I need to report all my PayPal goods & services income on Schedule C. They also explained that I should keep my own records of all transactions as proof in case of an audit. Definitely worth it just to get a clear answer straight from the source!

One thing nobody's mentioned - if you're reporting PayPal income without a 1099, make SURE you don't double-report if they end up sending you a delayed form. My friend got a 1099-K from PayPal in late February after already filing, and had to do an amended return. Such a headache!

I went through this exact situation last year. If your PayPal is linked to your bank account, you can also double-check your deposits to confirm your total income for the year. I just downloaded my bank statements, highlighted all the PayPal deposits, and totaled them up. One thing to watch for - make sure you're only counting actual sales and not counting money transfers from friends or family! PayPal goods & services (which charges fees) is different from Friends & Family payments (which don't). Only the goods & services counts as taxable business income.

Just an extra tip - I track all my PayPal goods & services transactions in a separate spreadsheet throughout the year. Makes tax time WAY easier since I'm logging expenses as I go. Also keep photos of inventory if you're selling physical items in case you ever get audited and need to prove cost basis.

Has anyone had success using the free file fillable forms on the IRS website for reporting PayPal income? I'm trying to avoid paying for tax software but I'm worried I'll miss something important.

I went through this exact same situation last year! You definitely need to report that $850 even without a 1099. Here's what I learned: First, download your complete PayPal transaction history for the year - you can get this from your account settings. This will be your documentation in case the IRS ever asks for proof. You'll report this on Schedule C as self-employment income. Put your total sales on Line 1 (gross receipts), then deduct any legitimate business expenses like materials, shipping supplies, PayPal fees, etc. The net profit flows to your 1040 and you'll also need Schedule SE for self-employment tax if your net earnings are over $400. Keep detailed records of everything - the IRS requires you to report all income regardless of whether you get tax forms. PayPal's 1099-K thresholds have changed over the years, but that doesn't affect your obligation to report what you earned. One tip: separate your business transactions from personal ones going forward. It makes tracking so much easier for next year's taxes!