Have Tax Information questions? Post here!

PayPal_Adrian
PayPal Employee
PayPal Employee

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! Smiley Happy

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377 REPLIES 377

wubbie2002
Contributor
Contributor

I am still confused, I have to sell more that $20,000 or 200 transactions.  Are these transactions both when you are selling and buying or just selling?

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danno0427
Contributor
Contributor
Hi, I wish I had the same information as well. At this point I will not know if I crossed the thresholds until I get a 1099k in the mail. I am interested to know how much tax will be taken, for example, if I hit the $20k mark.
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sici
Contributor
Contributor

I start to believe they do not want to issue such info to avoid sellers to stop selling and not passing the mark. Well they can see they lost my business in the past 2 months. Is there anyway a valued customer with an ADVANATGE status can find this out? I asked the question for 3 or 4 times and never got an answer. Especialy in my case I get payments in 3 different currencies and is hard to calculate the $$$ ammount with daily currency value 😞 all they need is a stupid report created. And they sure have one or how they can report to the IRS if you are or not over the value?

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satellitemania
Contributor
Contributor

Yeah, when you think about it, PayPal isn't the one that wanted to implement this, it's our government that required PayPal and other like services to report this information to the IRS.  It takes time, and money, to write programs and guess we should be glad we got anything from Paypal to work with.  And if they spend a lot of time/money writing a bunch of programs for all of this the fees will go up!

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brewhardware
Frequent Contributor
Frequent Contributor

It's going on your tax return as additional income so there's no way to know how much tax you'll owe. Why is it paypal's problem?

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jaydawg44
Member
Member

There is an easy way to determine whether or not you have exceeded the threshold for IRS reporting...if you know how to use an excell spreadsheet. Download your "completed transactions" history from 1/1/11 to 12/31/11 in a comma delineated (CSV) format. If you have excell on your computer, it will automatically open in excell. If you both send and receive payments using PayPal, what you have to do is remove payments that you "sent". These will show as a negative value. With these removed, you can see how many payments you received. Now sum the "amount Paid" column and that will give you your total for the year. You can also set the filter so that it only downloads payments that you recieved.

 

If BOTH the number of payments received exceeds 200 AND the total amount RECEIVED exceeds $20,000, you will recieve a 1099 notice from paypal showing how much was reported to the IRS under your tax ID number. Payments that you SEND do not count. Payments received from family and friends as "personal" payments also do not count toward the the threshold reporting requirements.

 

If paypal made a special report for these numbers widely available, members who got close to the threshold might stop using paypal until the threshold reset or might open a new paypal account with a different tax ID (spouse, business, child, etc) that would not meet the threshold. This might force the IRS to make even stricter policies such as automatic reporting for everyone.

 

You should really report all income from sales on your tax return. If you subtract the cost of goods, fees, advertsing, and shipping, you would only pay tax on the "net profit" received. For most, this would be reported on a Schedule C.

 

Hope this helps.

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ZIMM14
Member
Member

Because you are FORCED to use paypal nothiing other to use with eBay period, my store my rules my terms for payment. LOL next time I go into kmarts or Walmarts I am going to tell them they can NOT sell that items for that price an they can not except cash anymore , wonder how they will react hmmmm

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brodav2
Member
Member

I found under history an link to 2011 financial report. Only available since the 15th of Jan. But, the figures are confusing. Where are the monthly EBay fees? The totals PayPal provided do not match mine at all!. And, when I call, I am put on hold and no one ever answers the phone. The purchase history is there but only a total. It is way off my records. PayPal needs to put on more people to answer the phone.

Sarah LOL is a joke when it comes to getting anything but stock answers.

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JefferyT
Contributor
Contributor

After you log-in to Paypal, under "History" click on "Reports". Then click on "2011Financial Summary".

It is a PDF file. You will need Adobe Acrobat Reader to view it.

 

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windmill22
Member
Member

When you enter all the monthly numbers on your 1099 in the correct spots, the total will automatically go in to the total.  The total IS of course the larger number on the 1099.   All of the info will go to Schedle C which is the Business form of your 1040.   windmill22

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