Have Tax Information questions? Post here!

[PayPal_Adrian]

Welcome to the Tax Information thread!

Should I post my question here?

Starting in 2011, all U.S. payment providers, including PayPal will be required by the IRS to report sales information about merchants who exceed $20,000 and 200 transactions to the IRS. If your question is related to this topic, please reply with a question or to assist another member.

We will  be merging existing questions in the Community into this board.  More information will be made available later.  Until an update is provided, please check out the previous IRS Workshop and www.paypal.com/irs. 

What questions don't go here?

All other tax-related questions, such as Profile settings for Tax, adding tax to invoices, adding tax to payments, whether or not you should charge your buyers tax, what tax rates to charge, are considered Off Topic and will be moved.  These questions are better placed in the About Business board instead.

Why can't I start a new Topic?

To facilitiate productivity in this board, and to keep questions and answers in one place, members can only post questions in this thread.  You will be able to reply to this topic, but not start a separate, new thread.

Will a PayPal Employee answer my question?

The PayPal Community Help Forum is a venue for members to assist other members, and is not an avenue to reach customer service.  If you require immediate assistance, assistance directly from PayPal, or account specific information, please contact customer service. 

Another community member is not an employee and is providing assistance to you as a fellow customer. PayPal employees will post in the Community from time to time, but they will always be marked as an employee.  This is noted by the PayPal logo next to their user ID. 

How will this board be moderated?

To help foster this board into a valuable help resource for members, we will be removing any unproductive posts.  Please review the Community Rules and Guidelines to learn more about posting guidelines.

Posting Tips

If you are asking a question, please provide as much information about the situation as you can.  The more information you can provide, the easier it will be for another community member to understand the issue and provide an insightful answer.  Please remember that posting your own or another person's contact information, physical address, email address, full name, phone number, or any other personally identifiable information is prohibited.

Thank you for helping us keep the Community Help forum a friendly and productive environment for all members. We look forward to your contributions! 

[spadaphoto]

I'm not clear whether Paypal reports all income receieved or only that which comes from eBay sales. For instance, if a friend uses Paypal to repay a loan to me, does that figure get added to the year's total? The wouldn't be right in my view...

total?

[TNMark]

I understand that it is $20,000 PLUS 200 payments to trigger the threshold.....

My question is.... Is that 200 transactions  of any kind or only those which collect money.

For example, I sell 150 items on ebay and collect $25,000.    I also BUY 100 items on ebay.  Did I exceed the treshold?

Thanks

Mark H

[PayPal_Adrian]

Welcome to the boards!

Payments sent don't count towards the reporting requirements - but any payments for goods or services that are received, do count towards that threshold.

Thanks!

Adrian

[tonglebeak]

What about personal payments? Are they included in that 200 payment threshold?

[PayPal_Adrian]

tonglebeak -

Excellent question!  Personal payments do not count towards this limit.

Thanks!

Adrian

[Dreamer7]

Hello Adrian. There are rumors that Paypal can send a 1099k even if it's below both thresholds. Is this true, or will this happen this year?

[brewhardware]

You do realize that you should be reporting the income anyway right?

[Dreamer7]

Of course I realize that, it's common sense. But what is the answer to the question?

[PayPal_Adrian]

Dreamer7 -

PayPal is only required to file (and will only file) for merchants who meet or exceed the reporting threshold.  As taken from www.paypal.com/irs:

Q:  Will all sellers receive a Form 1099-K?

A:  No. Only sellers who exceed the IRS thresholds will receive Form 1099-K. Sellers exceed the IRS thresholds when they receive over $20,000 USD in gross payment volume for the sale of goods or services AND receive over 200 payments for goods or services in the same calendar year.

Thanks!

Adrian

[Dreamer7]

Thank you for answering Adrian.