PayPal vs. Stripe vs. Square 1099-K: Key Differences for Preparers

The $20,000 / 200-transaction threshold is federal and applies the same way regardless of processor, but the paperwork each one produces — and the traps in reconciling it — differ enough to be worth knowing before the client hands you the form.

Stripe

Stripe's own transaction exports come in a few different shapes depending on what the client (or their developer) pulled. The itemized or balance-transaction report includes gross, fee, and net columns plus a reporting category — the most reliable format for reconciliation, since charges, refunds, and fees are cleanly separated. A plain Charges export, by contrast, often omits fees entirely, which can make Line 10 expenses look artificially low if that gap isn't flagged. Payout reports are the one Stripe export that should never be used for reconciliation — payouts are batched across multiple days and already net of fees, so they will never tie cleanly to Box 1a.

Square

Square's Transactions CSV reports Gross Sales, Fees, Tax, and Partial Refunds as their own columns, which makes sales tax pass-through easier to isolate than in a typical Stripe export. Square clients are common in retail and food service, where cash and card transactions may be mixed — worth confirming that the 1099-K only reflects card-present and online processing, not the client's full revenue picture including cash sales that never touch Square at all.

PayPal

PayPal's reporting tends to mix personal and business transaction types more than Stripe or Square do by default, which matters because personal "friends and family" transfers are not supposed to count toward the 1099-K threshold, even though they can appear in the same account history. A client using PayPal for both business receipts and personal transfers needs that split confirmed before the gross figure is trusted at face value — an inflated Box 1a from included personal transfers is a real, recurring cause of 1099-K mismatches specific to PayPal.

The reconciliation logic that doesn't change

Regardless of processor, the same rule holds: Box 1a is held equal to Schedule C Line 1, refunds move to Line 2, and fees are deducted as a business expense elsewhere — never netted against receipts. The processor determines which export to pull and which platform-specific trap to check for; it doesn't change what the reconciled numbers are supposed to look like once you have them.