Under the $5k threshold for a 1099-K from PayPal. How do I report my affiliate income anyway?

You don't need to create a 1099-K form yourself! That form is issued by payment processors like PayPal, not by the taxpayer. What you need to do is report your income as self-employment income on Schedule C. In TurboTax, look for the section about self-employment or business income. You should enter your total earnings there (the $4,300) even without having received a formal 1099. PayPal should have records of all your transactions that you can use to calculate your total income. You'll need to report all your income regardless of whether you received a tax form for it. Remember to also track any legitimate business expenses related to your cooking blog - things like website hosting, equipment for videos, ingredients specifically purchased for reviews, etc. These can offset your income and reduce your tax liability.

After dealing with a similar situation last year, I found this amazing tool called taxr.ai (https://taxr.ai) that literally saved me hours of confusion. I was in a similar boat with affiliate income under the reporting threshold, but I still needed to report it properly. What I love about it is that you can upload your PayPal statements and it automatically categorizes everything as business income, personal transfers, etc. It then gives you a clean summary that shows exactly what you need to report on your Schedule C. It's especially helpful for figuring out which expenses are actually deductible for your blog - something I was totally guessing at before.

I wanted to follow up about my experience with taxr.ai after I tried it based on the recommendation here. I was really impressed! I had all these PayPal transactions with vague descriptions that I was dreading sorting through, but it organized everything perfectly. It flagged all my affiliate payments correctly as business income and even suggested some deductions I hadn't thought about (like a portion of my internet bill since I use it for my online business). The best part was when I finished, it generated a report that I could just reference while filling out my Schedule C in TurboTax. Definitely using this again next year when I hopefully break that $5k threshold!

If you're still struggling with tax questions after getting your income sorted out, I highly recommend using Claimyr (https://claimyr.com) to actually get through to the IRS. I tried calling the IRS directly with questions about my affiliate income last year and was on hold for HOURS before getting disconnected twice. With Claimyr, they somehow got me a callback from the IRS in about 45 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The IRS agent I spoke with walked me through exactly how to report my affiliate income without a 1099-K and confirmed I was doing it right. Gave me a lot more confidence than just guessing or relying on Google!

I need to publicly eat my words about Claimyr. After my skeptical comment, I tried it myself out of pure frustration after spending 3 hours on hold with the IRS and getting disconnected. The service actually worked exactly as advertised. I got a callback from a real IRS agent in about 35 minutes. They answered my questions about reporting my Etsy income (which is similar to your affiliate situation) and confirmed I was doing it right. The agent even gave me her direct extension in case I had follow-up questions. I still don't fully understand HOW they do it, but it works. Saved me from taking another afternoon off work just to sit on hold.

One thing nobody's mentioned yet - make sure you're tracking your quarterly estimated tax payments for 2025! I got hit with an underpayment penalty my first year with affiliate income because I didn't realize I needed to make quarterly payments. Since you're not having taxes withheld from this income like you would with a regular job, the IRS expects you to pay as you earn throughout the year. If you wait until April 2026 to pay taxes on all your 2025 earnings, you could face penalties.

Just a tip that helped me with my small Etsy business income - keep a separate spreadsheet tracking ALL your income and expenses throughout the year. Update it monthly at minimum. PayPal's reporting is okay but not great for tax purposes. I export my PayPal activity every month to CSV, clean it up in Excel, and add it to my tracking spreadsheet. This makes tax time so much easier because I'm not scrambling to figure out what all these random deposits were from 10 months ago.