1099k doesn’t include PayPal transactions

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Tourist
6 0 4
Hi there ,I have got my 1099k , I’ve noticed that it only shows my gross sale total that were processed via Shopify payments. and actually my most transactions were made via PayPal (but i didn't receive 1099k from my paypal since those two conditions weren't met there ) .
My questions are , when I go do my tax return can I just print out my shopify yearly sales financial summary to report my income ? cos if I just bring in this 1099k ,it doesn't have my actual gross sale amount .
Anyone has similar experiences plz feel free to share and help .

Thanks
Nikki
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New Member
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I had the exact same question. 

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Shopify Staff
Shopify Staff
678 50 152

This is an accepted solution.

Hi, @nyz and @CurlyChicCrafts!

 

Julie here from Shopify Support.

 

This is a great question, and especially relevant given the fact that we're heading into tax time. 

 

In the United States, if you process more than $20,000 and have more than 200 transactions, then you are required to submit a 1099-K form to the IRS. If you meet these requirements, then Shopify will automatically generate the 1099-K form and submit it to both you and the IRS. This can be found in Settings > Payment providers > Shopify Payments > View payouts > Documents. We also have a help doc on how you can access this report here

 

Keep in mind that this only applies to gross sales generated through Shopify Payments; if you meet these requirements for orders processed via another payment gateway, then you'll just need to check in with your other payment providers to find out how you can obtain that form. I did, however, manage to find some information from PayPal regarding 1099-K forms and how they can be obtained. You can check that out here

 

Aside from the 1099-K form, Shopify also gives you access to tax reportsThe Sales finance report, for example, can help with your sales tax reporting and includes the values that you'll most likely need while filing your taxes, like gross and net sales generated during a specific timeframe. This report can be exported as a CSV file; if you're working with an accountant, it's a great idea to provide them with a copy of this report. 

 

Ultimately, I recommend reaching out to PayPal directly if you are needing a 1099-K from them and they should be able to point you in the right direction. If you have any other specific questions on tax reporting, then my advice would be to reach out to a tax expert who is qualified to provide you with guidance on how to best proceed. 

 

I hope this helps! 

Julie | Social Care @ Shopify
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Tourist
6 0 4
Hi Julie , thank you for your reply :)
I went to do my tax return today , I provided my shopify finances summary for 2019 which shows payments total processed via both shopify and paypal , it was taken, so yay !

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Tourist
6 0 4
Hi , I just did my tax return today .I printed out my shopify finances summary which has both shopify payments and paypal payments total amount ,and it was taken,Hope this helps .
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New Member
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"Keep in mind that this only applies to gross sales generated through Shopify Payments; if you meet these requirements for orders processed via another payment gateway"      From my calculations, it seems payments made via PayPal payments are also included on Shopifys 1099-k?  I don't otherwise balance.   I show Shopify payments matching what is under box 1a ... box 1b seems to include paypal payments, cash, gift cards etc?   Because I balance only this way.   My numbers also balance when I do my PayPal 1099-k... so to me it seems payments made via paypal are on both shopifys 1099-k and the paypal 1099-k.      Shopifys 1099-k is entitled "Payment Card and Third Party Network Transactions"    What am I missing please? 

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Shopify Partner
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Thank you this is so helpful!

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Shopify Staff
Shopify Staff
678 50 152

Hey, @mYsensoryTools!

 

Because the 1099-k form from Shopify only reports gross transactions processed through Shopify Payments, PayPal transactions will not be included in this form. If you are wanting to review the raw data on how your 1099-k is calculated, you can do so by following these steps: 

 

  • Log into your Shopify admin and go to Settings > Payment providers > Shopify Payments > View Payouts > Transactions. From here, export your transactions by date, following these instructions. Make sure to set your date range to about 10 days either side of 2019, to make sure you don't miss anything.
  • Once you've received and opened your export, you will want to sort your transactions based on column H (Available on). This is the date when the money actually changed hands from the customer's bank to your processing account and is the date Shopify uses for tax purposes. Once you have sorted your spreadsheet, delete any rows with an Available on date of either 2018 or 2020.
  • Next, since the 1099-k only reports gross processing, you will now need to sort your spreadsheet by column B (Type) and remove any rows with a Type listed as anything other than Charge. This means you will be deleting any rows with a Type of Refund, Adjustment, Chargeback, etc.
  • This will leave your spreadsheet containing only transactions with a Type listed as Charge and an Available on date of 2019.
  • The final step is to calculate the sum of column I (Amount) and this should correspond to the value you are seeing on your 1099-k.

This should help clear up any confusion you may have!

Julie | Social Care @ Shopify
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New Member
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I understand this and mention box 1a makes sense.. it is box 1b that does not?  What is 1b including please?    

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Shopify Staff
Shopify Staff
678 50 152

Hey, @mYsensoryTools. To clarify, Box 1b (card not present), is the first gross figure, minus any transactions where the card was physically present for the transaction, like POS sales, for example.

 

In other words, Box 1b refers to any transactions which were processed without physically inserting a credit card into a card reader. This would include both online sales or sales that were processed by manually entering the credit card number in the POS checkout.

 

If you have any further questions about this form, the IRS actually has a handy guide on understanding your 1099-k that I think you'll find pretty useful. 

 

I hope this clears things up!

Julie | Social Care @ Shopify
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