PayPal taxes for freelancers
Your PayPal 1099-K reports gross payments, before fees and refunds. That's not what you owe tax on. Here's how to reconcile it.
Report gross, deduct the fees
Report the gross amount as income, then deduct PayPal's fees as a business expense. Refunds you gave customers reduce your income too. Done this way, your return matches the 1099-K the IRS also sees.
Export your PayPal activity
- Sign in at paypal.com → Activity → Statements → Activity download
- Choose a date range and CSV
- Import into Quarterbird. Each fee becomes its own write-off automatically.
Know your number for every payment.
Import from Venmo, Cash App, PayPal, Stripe, Square or your bank. No bank login required. Reminder before your trial ends.
Frequently asked questions
Are PayPal fees tax deductible?
Yes. Fees on business transactions are deductible on Schedule C (commissions and fees, line 10).
Related
- Venmo taxes for freelancers: business income, 1099-K and exports
- Cash App taxes for freelancers: 1099-K, business payments and write-offs
- How much to set aside for taxes on 1099 income (2026)
Estimates and general information, not tax advice. Check with a tax professional for your situation.