Monday, January 30, 2017

Taxes made easy with Paypal Annual Financial Summary Report

Taxes made easy with Paypal Annual Financial Summary Report

United States business / premier Paypal account holders can access the Annual Financial Summary Report for key information when filing tax returns. This report contains valuable information used on Tax Form Schedule C Profit or Loss from Business. To access the report, online sellers should log in to Paypal, then:

1. Click the Activity link across the top
2. From the drop down box on the right, select Reporting Center
3. In the middle of the page, select Annual Financial Summary.
4. Select the tax year from the drop down list and click “download report”

The Annual Financial Summary includes key information that can be used on Tax Form Schedule C Profit or Loss from Business. Specifically:
Schedule C, Gross Receipts = Sales Activity / Payments Received
Schedule C, Line 2.Returns and allowances = Sales Activity / Refunds sent
Schedule C, Line 27a Other Expenses = Fees / Payment fees

In addition to the information provided on the Annual Financial Summary Report, Paypal users exceeding the 
IRS threshold amounts will receive a 1099-K form. To see if your account qualifies for a 1099K form, visit How Online Sellers Find Tax Form 1099-K from Paypal.


Sellers should have an organized bookkeeping system to store receipts. A simple and inexpensive solution is a
bankers box. More sophisticated sellers may choose to store receipts digitally using a receipt scanner. Online sellers who have experience completing a tax return can file online for free using the IRS free file program. Visit How to File Federal Taxes Online for Free. Less experienced tax filers may use TurboTax which offers a guided, step-by-step questionnaire tailored to your personal income tax situation. For further information on tax laws relating to online selling, The Complete Tax Guide for E-commerce Retailers including Amazon and eBay Sellers is a great read!