Preventing double 1099-K reporting of same rental income paid out from AirBnB to your PayPal account

[Resort-Vacation-Rentals0]

What do we do to prevent double reporting on the same income paid by AirBnB to our PayPal account, as both companies will issue a 1099-K form to us and the IRS, and in 2022 the threshold drops way down from only if over $20,000 in income and 200 transactions to anyone making more than $600 -- regardless of transactions. So now the majority of hosts will be receiving those forms at the end of this year.

TripAdvisor once told us we did not have to provide Tax ID info since paid out to PayPal who reports it to prevent double reporting, but AirBnB has said no such thing and we can't find the answer anywhere (and we asked reps at both AirBnB and PayPal to and none knew). Very surprised this issue hasn't been addressed, but if any of you have a link please let us know!

[Lorna170]

@Resort-Vacation-Rentals0   Due to the changes in reporting, IMO, you would be better to have your AirBnB income go to a separate bank account.  I do not mingle payment accounts -- AirBnB payments go to X bank, VRBO to Y bank and Paypal stands alone.   Keeps the record keeping very clean.

Don't expect AirBnB (or any other OTA) to solve the duplicate 1099 reporting issue.

[Resort-Vacation-Rentals0]

It's not a matter of expecting them to "solve" it.  The point is that they offer it as a payout option and thousands of hosts use it.  As such, it will definitely be an issue for many and they will definitely be fielding this question a lot.  Therefore they should be prepared to answer it or offer a solution or some sort of answer.

Secondly, we would prefer all our payouts go to PayPal because every payment that we receive to our bank account must be transferred there anyway.  That is where we hold all income and funds, including security deposits, so that when a guest checks out they can be transferred to the owner's account, or ours or refunded to a guest, etc.  It is our central holding place and we were trying to see if other sites like VRBO or Booking.com could payout to PayPal as well, like AirBnB and TripAdvisor.

So now it is a matter of which is more inconvenient.  Logic alone states that when suddenly in one year a huge majority of people will have to figure all this out it will be a huge mess and there will be lots of confusion and mistakes.  We wouldn't be surprised if the government alters the rule a bit or comes up with something to mitigate the issues.

[Jill104]

@Resort-Vacation-Rentals0  this is a VERY important question! I would be interested to learn more about how this is going to work. Sounds like a mess!

[Resort-Vacation-Rentals0]

After further investigation turns out all income will be reported by all parties whether duplicate or not, and it is up to us report it as a deduction/duplicate or else write it off as an expense on our tax returns, along with any refunds due to cancellations, damage deposit refunds, etc., as anything we receive from AirBnB, Vrbo, Booking.com, TripAdvisor, etc. (and all PayPal payments not made as a "friend") will be reported to the IRS.  What a hassle it will be next year!

[Resort-Vacation-Rentals0]

UPDATE on this issue:

This is not an issue because payouts deposited to your PayPal account is not income.  The money AirBnB charges on your behalf to guests and the subsequent payments they make is income.

This is the same as deductions made by your employer's paycheck for Social Security, etc.  When you deposit that paycheck into your bank it isn't again taxed as income by your bank.  It is a deposit.

The point is moot however (for now anyway) because the U.S. government decided to postpone the much stricter threshold at the last minute during the final week of 2022.  So threshold remains at 1099K reporting only for those receiving 200 transactions or more that equal $20,000 or more per year.