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.

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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.

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[brewhardware]

You have to declare your business income, as suggested by the 1099, on your tax return by 4/15. However, you may want to rush that a bit if you think you've really underpaid your taxes. You'll pay less penalty the faster they get their money.

[gabbysuz]

Hi,

How does one go about requsting a revised 1099 form ?    My Father has a business account,  and he

being easily confused, by mistake entered in my Tax ID number when they requested it,  mainly becuase I'm helping

him learn how to manage and use it so he thought they needed my number.

So currently the 1099 form showing online and I presume being mailed is incorrect because the business / business account is owned by Him,  yet it has my tax ID number on it !   It also has an incorrect mailing address, not the current listed business address on it.

Any help is much appreciated,

Thanks,

Felix

[onicron]

thank you very much for the answers 🙂


but I'm confused

My accountant says that a 1099-k has nothing to do with my taxes as a business.
he say :it's about only and credit card transactions and debit cards
Anyone know an accountant online? 😞
I need another answer

[brewhardware]

---

@onicron wrote:

thank you very much for the answers 🙂


but I'm confused

My accountant says that a 1099-k has nothing to do with my taxes as a business.
he say :it's about only and credit card transactions and debit cards
Anyone know an accountant online? 😞
I need another answer

---

If you are accepting payments through paypal, and it is positively affecting your cash flow, I don't know any other way to account for that incoming money. It is "income" unless there is something I'm not understanding. Your accountant is probably assuming you are already tracking the income somewhere else.

This 1099 is how the IRS is being made aware of money flowing in your direction. I don't know how your accountant is suggesting  you handle this amount on your returns, but I'd want to make sure that income was being reported somewhere.  For most people that will get 1099K for processing credit cards in their store, that income is already being tracked in a separate book keeping process so the income is reported one way or another.

The problem here is that 99% of casual paypal users and eBay auctioneers think that the money they were making all these years was tax free and unreportable and now the 1099 is the trigger that forces them to report the amounts that come in box 1.

[Smokymist]

see this is a question of mine. I have been reporting my income, on my quarterly taxes that I file throughout the year. So do I put this paypal number down on top of what I normally already put on my yearly tax return ? If so that would make my income double.

[chloetime]

HI- I guess I am just hoping for some help, my 1099-k has no ID # on, it has all 0's all the way.. They have my SS# and I did call paypal and requested a corrected version, but when willI I get it, I really need to get in and file my taxes. I called paypal twice and got 2 completely different answers, so just concerned, not having any ID# on it cant be good. My accountant just says its as easy as just getting a corrected 1099-k but how long will it take to get?

Thanks for any advice and reassurance

[incware-1]

I have a considerable amount of refunds and chargebacks since I shipped internationally on ebay/paypal. Are these BOTH deductible from the gross amount reported by paypal on the 1099-k?

[4Crawler]

---

@incware-1 wrote:

I have a considerable amount of refunds and chargebacks since I shipped internationally on ebay/paypal. Are these BOTH deductible from the gross amount reported by paypal on the 1099-k?

---

Yes, they should be deductable but are not reported on the 1099-k form.  Before this year, I never tracked refunds (I get a lot of buyers who send me excess payment for one reason or another) and I would always just book the net order.  But now that we are being dinged with the gross payment, refunds and other things like that (charge backs) are considered (or should be considered) as expenses.  This year I am adding up refunds as separate expenses, although it seems Paypal reports them on your 2011 FInancial Summary (but not on the 1099-k).

It is almost like someone goes into your corner store and buys a pack of gum for $1.99 and hands you a $20 bill.  While the net sale was $1.99, you actually report a $20.00 gross payment and a $18.01 refund, leaving a $1.99 net sale.  Seems like 2-3 times the book keeping to me, but I guess the IRS figures us small business owners have a lot of free time to kill 🙂  It is like Paypal is sitting at the door to your store and counting how much money enters the store but they don't check what leaves (that is up to you).

[code600]

Ok so I have downloaded my whole completed history of the transactions and grouped them by expense and income. I've added the refunds from the financial summary report. Is there anything else included? I seem to be off on the income. What else am I missing in it?

[grahambr]

OK...so I have the exact issue... the amounts dont add up to what was reported... Here are the fields in the report..which ones should I be adding from the GROSS section to get the total?

Paypal... can you help answer?  This is driving me crazy!

Cancelled Fee

Currency Conversion

Express Checkout Payment Received

Express Checkout Payment Sent

Mobile Express Checkout Payment Received

Order

Payment Received

Payment Sent

Pending Balance Payment

Preapproved Payment Sent

Refund

Request Received

Reversal

Shopping Cart Payment Sent

Temporary Hold

Update to eCheck Received

Update to Reversal

Web Accept Payment Received

Withdraw Funds to a Bank Account