What tax records should I keep if I’m paid through platforms like PayPal or Stripe?

What counts as “being paid through PayPal or Stripe” for tax purposes?

If you earn money through payment platforms like PayPal or Stripe, you’re usually receiving income in a way that’s easy to track digitally—but that doesn’t mean the platform is your full accounting system. For taxes, what matters is not the platform itself but the underlying activity: selling products, providing services, freelancing, collecting deposits, running a subscription, receiving tips, or operating an online store. PayPal and Stripe are tools that process payments, and they can generate useful records. Still, you generally need your own set of supporting documents so you can prove what you earned, what you spent, and why certain transactions aren’t taxable income.

Many people assume that “whatever PayPal says I received” equals “my taxable income.” That’s rarely true. Payment platforms often show gross inflows that include refunds, chargebacks, processing fees, shipping amounts collected from customers, sales tax or VAT collected on behalf of a tax authority, and even transfers between your own accounts. Your job is to keep enough records to correctly separate true business income from non-income movements and to support the expenses you deduct.

This article breaks down the tax records you should keep when you’re paid through PayPal or Stripe. It’s written to be practical: what to save, how to organize it, and how those records fit together when you file your tax return or respond to a tax authority question.

Start with a simple goal: prove every number on your tax return

The best way to think about recordkeeping is: “Could I explain every number on my tax return with documents?” If you can support your income and deductions with clear records, you reduce stress and risk. Good records also help you avoid overpaying taxes by missing legitimate deductions, and they make it much easier to spot issues like double-counted income or unexplained fees.

For most people paid through PayPal or Stripe, the key numbers you need to substantiate are:

1) Total gross income from sales or services (before fees).
2) Refunds and returns (reducing income).
3) Platform and processing fees (often deductible expenses).
4) Other business expenses (advertising, software, supplies, shipping, contractors, home office, etc.).
5) Taxes collected from customers that you pass through (not your income).
6) Any other adjustments (chargebacks, disputes, currency conversion differences).

You don’t need to keep every scrap of paper forever, but you do need a consistent set of records that show what happened and why.

Core income records to keep

1) Sales invoices, receipts, or order confirmations

Even if you don’t issue formal invoices, you should have some record that explains what each customer paid for. Depending on your business model, this could include:

• Invoices you send (PDFs, accounting software invoices, email invoices).
• Checkout/order confirmations from your website or e-commerce platform.
• Booking confirmations for services (consulting sessions, photography shoots, coaching appointments).
• Subscription signup records and recurring billing details.

Why these matter: they prove the nature of the income (what you sold or what service you provided), the date of the transaction, and the amount. They also help you categorize income correctly if you have multiple revenue streams.

2) Payment platform transaction exports (PayPal/Stripe reports)

PayPal and Stripe both allow you to export transaction histories. You should regularly download and save:

• A detailed transaction list for the period (monthly is ideal).
• A summary report showing gross receipts, refunds, chargebacks, and fees.
• Payout reports showing transfers to your bank account.
• Fee reports showing processing fees, platform fees, and other charges.

These exports are often the backbone of your income reconciliation. They show the flow of money through the platform, not just what reached your bank. If you ever lose access to your account or the platform changes how it displays history, your saved exports can become essential.

3) Bank statements for the accounts that receive payouts

Payment processors typically pay out to your bank account (or multiple accounts). Keep the bank statements for any account that receives business funds. Bank statements help you confirm payouts and provide an independent record outside the platform. They’re also useful for:

• Proving timing of deposits (cash basis taxpayers often rely on deposit timing).
• Spotting missing payouts or mismatches.
• Identifying business expenses paid directly from the bank account.

A strong recordkeeping setup uses both platform reports and bank statements because they cross-check each other.

4) Customer communication that explains unusual transactions

Most transactions are routine, but some need context: a customer dispute, a partial refund, a negotiated discount, a cancellation fee, or a special arrangement. Save relevant emails or messages for transactions that look odd in the data. This can be as simple as creating a folder called “Disputes/Refunds” and dropping in screenshots or PDFs.

Records for refunds, returns, and adjustments

5) Refund documentation

Refunds reduce your net income, but you need to document them. Keep:

• Refund confirmations from Stripe/PayPal.
• The original invoice/order record.
• A note about why you refunded (return, cancellation, goodwill, duplicate payment).

This matters especially if your platform statements show large gross receipts. If you’re ever asked why your gross volume differs from your taxable income, documented refunds are one of the most common explanations.

6) Chargebacks and dispute records

Chargebacks can be complicated: sometimes you lose the income, sometimes you keep it, and often you pay additional fees. Keep:

• Chargeback notifications and outcomes.
• Evidence you provided the product/service (delivery confirmation, project files, time logs).
• Fees charged related to the dispute.
• Any customer correspondence.

Even if a chargeback is rare, it can create large swings in your monthly totals. Documentation helps you classify it correctly and supports your position if a tax authority questions the numbers.

7) Currency conversion records (if you take international payments)

If you receive payments in multiple currencies, platforms may convert them before payout. Keep:

• Platform records showing the original currency amount, exchange rate, and converted amount.
• Any separate currency conversion fees.
• Notes on how you record conversions in your bookkeeping.

Exchange differences can cause your payout totals to differ from invoice totals, and having records helps you reconcile that gap.

Processing fees and platform fees: records you should keep

One of the most overlooked deductions for platform-paid earners is the total cost of payment processing. Those fees add up, and they’re often buried in transaction-level data. Keep:

• Monthly fee summaries from Stripe/PayPal.
• Transaction exports that include fee fields.
• Any platform subscription invoices (for premium features, fraud tools, or add-ons).
• Statements showing network fees, chargeback fees, dispute fees, payout fees, or international card fees.

When you keep clean fee records, you can report income accurately (often as gross receipts) and deduct fees as expenses rather than mistakenly treating the post-fee payout as your income and losing track of the deductible cost.

Taxes collected from customers: keep records so you don’t overreport income

Depending on where you operate and what you sell, you might collect sales tax, VAT, GST, or similar consumption taxes from customers. Often, those taxes are not your income if you’re collecting them on behalf of a government authority. But payment platforms and e-commerce systems might still show the total amount paid by the customer.

You should keep:

• Reports from your store/e-commerce platform showing tax collected.
• Tax filings and payment confirmations to the tax authority.
• Any marketplace facilitator statements if a platform collects and remits tax for you.
• Transaction records that separate product/service price from tax and shipping.

This helps you avoid reporting pass-through tax as taxable revenue and supports the difference between “amount customers paid” and “amount that is actually your income.”

Expense records to keep (beyond the payment platform)

PayPal and Stripe tell you about money that came in and the fees taken out. They don’t tell you the full story of your business expenses. If you want to claim legitimate deductions, you need to keep records for the costs you paid to earn that income. Here are the most common expense categories and what to save.

8) Software subscriptions and tools

If you run online services or sell online, you likely pay for software: accounting tools, design software, email marketing services, website hosting, project management tools, domain renewals, scheduling apps, and more. Keep:

• Receipts or invoices for each subscription.
• Proof of payment (card statement, bank statement).
• A simple list of what each tool is used for (helpful if the name is unclear).

9) Advertising and marketing

Marketing expenses can be a major deduction. Keep:

• Ad platform invoices and monthly statements (Google Ads, Meta ads, etc.).
• Receipts for influencer payments or sponsorships.
• Receipts for printing, branding, photography, or promotional materials.
• Affiliate network statements.

If your ads run through multiple platforms, create a folder per platform and save monthly summaries. It makes year-end totals much easier.

10) Cost of goods sold and inventory (for product sellers)

If you sell physical goods, you’ll need to track purchases of inventory and materials. Keep:

• Supplier invoices and receipts.
• Shipping costs from suppliers.
• Import duty/tariff documents if applicable.
• Inventory counts (beginning and end of year).
• Records of manufacturing or assembly costs if you produce items.

Product businesses often have different tax reporting requirements than service businesses, so clean inventory records can matter a lot.

11) Shipping and fulfillment

Shipping can show up in different places: sometimes you buy labels directly; sometimes it’s through a fulfillment partner; sometimes customers pay shipping and you pass it through. Keep:

• Shipping label receipts (from carrier accounts or label services).
• Fulfillment invoices (pick/pack fees, storage fees).
• Postage statements if you ship high volume.
• Documentation tying shipping costs to orders (helpful for disputes and chargebacks too).

12) Contractor, freelancer, and staff payments

If you pay others—virtual assistants, designers, developers, editors, bookkeepers—keep:

• Contracts or engagement letters.
• Invoices from the contractor.
• Proof of payment (bank transfer, PayPal payment record).
• A record of what services were provided and when.

If you pay people through PayPal, keep those PayPal outgoing payment records separate from your incoming customer payments. Many people mix them, which creates confusion at tax time.

13) Equipment and supplies

Keep receipts for business supplies and equipment: laptops, cameras, microphones, printers, office supplies, packaging materials. Also keep:

• Warranty documents and serial numbers for major equipment (useful if you claim depreciation or special tax treatment).
• Notes about business vs personal use if the item is mixed-use.

Big-ticket items are more likely to be questioned, so the documentation is worth extra care.

14) Home office records (if applicable)

If you claim a home office deduction, the recordkeeping is more involved. Keep:

• Measurements of the office space (square meters or square feet).
• Photos showing it is used regularly and exclusively for business (if required where you are).
• Rent or mortgage interest records, utility bills, internet bills, home insurance, and repairs—plus a method for allocating the business portion.

The key is consistency: decide on a reasonable allocation method and keep the bills that support it.

15) Vehicle and travel (if applicable)

If you travel for business or use a vehicle, keep:

• Mileage logs (date, purpose, starting/ending odometer or distance).
• Fuel receipts and maintenance invoices if you use actual expenses method.
• Travel itineraries, lodging receipts, and transportation receipts.
• Notes on the business purpose of each trip.

Travel and vehicle deductions often require stronger substantiation than ordinary expenses, so don’t rely on memory later.

16) Professional fees and education

Keep receipts for:

• Accounting and tax preparation fees.
• Legal consultations.
• Business coaching or professional training that relates to your current business activity.
• Licensing fees, professional memberships, and trade association dues.

Platform-issued forms and notices: keep them, but don’t rely on them alone

Depending on your country and the platform, you might receive tax-related forms or summaries. These can be helpful, but they aren’t a substitute for your own books. You should save:

• Any annual payment summaries the platform provides.
• Any tax forms issued by the platform (if applicable in your jurisdiction).
• Any emails or dashboard notices about reporting thresholds or account classification changes.

These documents can explain why a tax authority might already have certain totals. But you still need your underlying records to prove how you arrived at your taxable income number—especially if your net differs from the platform’s gross.

Separating business and personal transactions: a recordkeeping superpower

If you do only one thing to improve your recordkeeping, do this: separate business and personal money flows as much as possible.

That can mean:

• Use a dedicated business bank account for payouts.
• Use a dedicated business card for expenses.
• Use a separate PayPal account for business activity, if the platform allows it.
• Keep owner draws/transfers clearly labeled.

When you mix personal and business transactions heavily, you create three problems: (1) you’ll spend more time sorting things out, (2) you’ll miss deductions, and (3) you’ll have a harder time defending your numbers if questioned. Separation doesn’t have to be perfect, but the clearer the lines, the better.

Reconciliation records: how to prove your totals match reality

Reconciliation is the process of matching what your platform says happened to what your bank shows and what your invoices show. This is where many people go wrong because they skip it, then guess at totals in a rush at year-end.

Keep records that support reconciliation, such as:

• A monthly reconciliation worksheet or bookkeeping file showing totals by month.
• Notes explaining differences (payout delays, refunds in a later month, rolling reserves, payout holds).
• Screenshots or statements for unusual one-off events.

You don’t need a complex accounting system to do this. Even a spreadsheet can work if it’s consistent and you keep the supporting documents.

Common transaction types that are not taxable income (and the records to prove it)

One major reason tax authorities question platform-paid taxpayers is that gross transaction volume can include non-income items. Here are common examples and what to keep to prove proper treatment:

Transfers between your own accounts

If you move money from PayPal to your bank, from Stripe to your bank, or between banks, those are transfers—not income. Keep bank statements and platform payout reports showing the transfer references and dates.

Personal reimbursements and gifts

If friends reimburse you through PayPal for dinner or send personal gifts, and you also run a business, keep notes and message context. Ideally, keep personal money flows out of the business account entirely. When it happens, documentation helps show it’s not business income.

Loans or capital contributions

If you receive funds as a loan or you add your own money into the business, keep the loan agreement or a simple written note describing the contribution, plus the bank record.

Sales tax/VAT collected

Keep tax reports from your selling platform and proof of remittance so you can show those amounts were collected and passed through, not retained as income.

Digital bookkeeping files to keep

Tax records aren’t just receipts. Your bookkeeping system—whether it’s accounting software or a spreadsheet—is part of your tax documentation. You should keep copies of:

• Your bookkeeping file or export (year-end backup).
• A chart of accounts or category list you used (so your categories are understandable later).
• Any year-end adjusting entries notes (if you worked with an accountant).
• Reports like Profit & Loss, Balance Sheet (if applicable), and transaction detail by account.

If you ever switch bookkeeping systems, export a full transaction list from the old system and store it with your records.

How long should you keep records?

Record retention rules vary by jurisdiction, and they can depend on your situation (for example, whether you’re dealing with asset purchases, property, or complex business structures). A practical approach is to keep tax records long enough to cover the period in which a tax return could be reviewed, plus a buffer.

As a general practice for many small businesses and self-employed individuals:

• Keep core tax return support (income and expense documentation) for several years after filing.
• Keep records for major assets (equipment, property improvements) for as long as you own the asset, plus additional years after disposal, because those records can affect gain/loss calculations.

If you’re unsure what applies to you, treat “keep it longer” as the safer default, especially for high-value purchases and anything that impacts multiple tax years.

How to organize your PayPal and Stripe tax records

The best system is one you’ll actually maintain. Here’s a simple structure that works for many people:

Folder structure by year, then by month

Create a top-level folder for each tax year. Inside it, create monthly folders (01-Jan, 02-Feb, etc.). Each month, save:

• PayPal transaction export (CSV/PDF).
• Stripe balance/transaction export (CSV).
• Bank statement PDF.
• Receipts and invoices (or a subfolder for them).
• Any refund/chargeback documentation.

Separate folders for annual items

Keep a folder for:

• Annual platform summaries or tax forms.
• Year-end bookkeeping reports (Profit & Loss, transaction detail).
• Inventory counts (if applicable).
• Major equipment purchases and depreciation schedules (if applicable).

Naming conventions matter

Use consistent file names like:

• “2026-03 Stripe Transactions.csv”
• “2026-03 PayPal Activity.csv”
• “2026-03 Bank Statement Business Checking.pdf”

When files are consistently named, you can locate documents quickly—even years later.

What to do if you don’t have perfect records

Many people realize late in the year that their records are messy. You can still improve things quickly:

• Download all available platform exports for the year and store them safely.
• Gather bank statements for all accounts that touched the business.
• Rebuild a basic income and expense summary by month.
• For missing receipts, check email inboxes, vendor dashboards, and card statements for duplicates or downloadable invoices.
• Add brief notes for unclear transactions while your memory is fresh.

Even partial improvements can make a big difference. The goal is to create a defensible trail from customer payments to platform records to bank deposits and then to your tax return totals.

Special scenarios: what extra records to keep

If you sell on multiple channels

If you sell through a website, marketplaces, social media, and invoicing—keep channel-specific reports. Your platform payout data might not tell you which channel generated the income. Save:

• Marketplace statements (fees, refunds, tax handling).
• E-commerce platform order exports.
• Separate invoice lists from your invoicing system.

If you receive tips or donations

Tips and donations can have special tax treatment depending on how they are structured. Keep:

• Platform records showing the tip/donation amount and date.
• Any membership or creator platform statements if applicable.
• Notes on what the payer received (if anything) in return.

If you run subscriptions or memberships

Subscription models create recurring payments, cancellations, proration, and refunds. Keep:

• Subscriber lists and billing cycle reports.
• Records of free trials converting to paid plans.
• Churn/cancellation reports (useful for explaining refund patterns).

If you invoice for services and take deposits

Deposits can create timing questions, especially if you’re paid before work is completed. Keep:

• Contracts or engagement letters explaining the deposit.
• Invoices showing deposit amounts and final balance due.
• Records of when the service was delivered.

Practical checklist: what you should save each month

If you want a straightforward monthly routine, here’s a checklist that covers most needs:

• Export Stripe transactions and balance activity for the month.
• Export PayPal activity for the month (incoming and outgoing).
• Download bank statements for accounts receiving payouts and paying expenses.
• Save receipts/invoices for expenses (software, ads, supplies, contractors).
• Save documentation for refunds and chargebacks.
• Update your bookkeeping (or spreadsheet) and reconcile totals to platform and bank records.
• Back up everything to a secure location (cloud storage plus a local backup if possible).

Common mistakes people make (and how records prevent them)

Mistake 1: Reporting only the payout amount as income

If you report only what hit your bank account, you may understate income if you’re supposed to report gross receipts and separately deduct fees. Or you may create inconsistencies with third-party reporting totals. Keeping fee summaries and transaction exports lets you report correctly and confidently.

Mistake 2: Forgetting refunds and chargebacks

Refunds and chargebacks can materially reduce income. If you don’t keep those records, you might overpay tax. Platform exports and dispute documentation help you capture these adjustments.

Mistake 3: Mixing personal and business activity

When personal transactions run through the same account as business payments, it becomes harder to prove what is income. Separating accounts and keeping context records (messages, notes) helps avoid misclassification.

Mistake 4: Losing receipts for digital expenses

Digital subscriptions and online ads often have invoices inside dashboards rather than emailed receipts. Saving monthly invoices and keeping payment proof prevents you from missing deductions.

Mistake 5: Not reconciling

Without reconciliation, you can double count income, miss fees, or mis-handle taxes collected. A monthly reconciliation file plus platform and bank records makes your numbers reliable.

Building a lightweight system that stays manageable

You don’t need to become an accountant to keep good tax records. A manageable system usually has three ingredients:

• A consistent schedule (monthly downloads and filing).
• A clear folder structure (by year/month).
• A simple bookkeeping method (software or spreadsheet) that you keep updated.

If you keep records as you go, tax time becomes a matter of summarizing and checking—not scrambling and guessing. And if you ever need to explain your figures, you’ll have a clean trail showing where the money came from, what it was for, and what costs you incurred to earn it.

Final thoughts: keep records that tell the story of your business

When you’re paid through PayPal or Stripe, your tax records should do more than show deposits. They should tell a coherent story: customers paid for specific products or services, the platform processed payments and charged fees, some transactions were refunded or disputed, taxes were collected and remitted when required, and you paid necessary expenses to operate. If your records can tell that story clearly, you’re in a strong position—whether you’re filing your own return, working with an accountant, or responding to questions later.

As a final practical reminder, prioritize the documents that are hardest to recreate later: platform exports (in case access changes), bank statements, invoices, and receipts for major purchases. Once those are safely stored, everything else becomes easier.