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! 

[brewhardware]

This may not be the exact answer, but I know that in order to reconsile the full history to the 1099 number, I had to remove records that seem to redundently account for the same numbers. In other words, just because the fee column is a negative number doesn't mean all the records need to be summed. On example is:

Date	Time	Time Zone	Name	Type	Status	Currency	Gross	Fee	Net
12/12/2011	19:40:49	EST	xxxx	Update to eCheck Received	Cleared	USD	131.95	-4.13	127.82
12/7/2011	15:48:36	EST	xxxx	Shopping Cart Payment Received	Cleared	USD	131.95	-4.13	127.82

Type: Temporary Hold   Status: Removed    (this shows a paypal fee but it is redundent from the original transaction)

Holds that result in Reversal completed also have to be removed (both records) or at least disregarded (I cut/pasted to a different sheet to not lose the info.

Example:

Date	Time	Time Zone	Name	Type	Status	Currency	Gross	Fee
10/19/2011	20:57:16	EDT	xxxxx	Reversal	Completed	USD	-11.99	0.65
10/12/2011	20:56:28	EDT	xxxxx	Temporary Hold	Removed	USD	-11.99	0.65

[Beadlynx]

Just a comment.

   I'll admit I only read as far as 15 pages in this thread, but I got more and more confused with each post.

So here's my solution for 2012. As I am new to PP, I figure the safest thing for me to do is print a copy of my acct

summary at the end of each month. One page for sales or recieved payments, one for refunds or chargebacks, one

for PP fees and so on. Then when I'm ready to file my taxes I'll already have my necessary info. It may be a little

more work for my tax preparer, but a lot less stress for me. Business continues. Hope this

helps someone.

[brewhardware]

---

@Beadlynx wrote:

Just a comment.

   I'll admit I only read as far as 15 pages in this thread, but I got more and more confused with each post.

So here's my solution for 2012. As I am new to PP, I figure the safest thing for me to do is print a copy of my acct

summary at the end of each month. One page for sales or recieved payments, one for refunds or chargebacks, one

for PP fees and so on. Then when I'm ready to file my taxes I'll already have my necessary info. It may be a little

more work for my tax preparer, but a lot less stress for me. Business continues. Hope this

helps someone.

---

It seems to be a lot more work that way. At least if you download the CSV file with ALL the fields turned on, you have the full data that you can manipulate. You can also use it to generate sales charts like:

[Smokymist]

I am just SO confused. I have done my own taxes using the upgradede version of Turbo Tax for 16 years, and never had one problem. Now Paypal has to throw a wrench in things by sending me figures that are more than what I have filed on my own quarterly taxes. I keep pretty good records too !

I am just holding off until late March to file, and reading everything I can in between hoping to learn something.

[Beadlynx]

Running a business IS work. But there is such a thing as information overload. I just prefer to keep it simple and organized. It makes for a more enjoyable atmosphere for seller and customer, don't you think?

[4Crawler]

---

@brewhardware wrote:

This may not be the exact answer, but I know that in order to reconsile the full history to the 1099 number, I had to remove records that seem to redundently account for the same numbers. In other words, just because the fee column is a negative number doesn't mean all the records need to be summed. On example is:

Date	Time	Time Zone	Name	Type	Status	Currency	Gross	Fee	Net
12/12/2011	19:40:49	EST	xxxx	Update to eCheck Received	Cleared	USD	131.95	-4.13	127.82
12/7/2011	15:48:36	EST	xxxx	Shopping Cart Payment Received	Cleared	USD	131.95	-4.13	127.82

Type: Temporary Hold   Status: Removed    (this shows a paypal fee but it is redundent from the original transaction)

Holds that result in Reversal completed also have to be removed (both records) or at least disregarded (I cut/pasted to a different sheet to not lose the info.

Example:

Date	Time	Time Zone	Name	Type	Status	Currency	Gross	Fee
10/19/2011	20:57:16	EDT	xxxxx	Reversal	Completed	USD	-11.99	0.65
10/12/2011	20:56:28	EDT	xxxxx	Temporary Hold	Removed	USD	-11.99	0.65

---

Well, that gets me a little closer, thanks.  But I still can't get the reported number exactly.  It seems that if Paypal could clean up the history file to eliminate these duplicate entries it would be easier for all of us to deal with.  Or provide a simple method for merchants to post-process the history file to do the same.  It seems every time I spoke with the support folks, I hear it is "simple", well if it is so simple, so me!!! Seems the process is:

Step 1: Download your history

...

Step N, Sum the gross payments received and that is the 1099-k line 1 number.

Now all we need is steps 2 - (N-1).

[brewhardware]

Yes, it appears that there are several nuances that the CSR's are oblivious about. Like I mentioned earlier, I bet most CSRs couldn't even name off a few of the transaction "types" above and beyond "payment sent" and "payment received". I don't know how many there are in total, but mine has something like 11 different types.

You can interrogate the data in two different ways. One is to use a pivot sheet to discover the different transaction types or the slightly easier way is to turn on the data filter for the whole sheet and then select single transaction types to show at a time. Once I see something goofy like "reversal cancelled", I filter to the customer name and release all other filters. Sure enough, it's double accounted.....delete one of them. The most annoying one is when the eChecks clear. I just delete the transaction for the "cleared" announcement.

Yes, they should either make it easier to download data devoid of this double info or be very clear about how to manipulate it once downloaded. I consider myself to be moderately savvy with excel and I can only imagine how bad it is for folks with no experience at all.

[grahambr]

The problem is that the listing is just a date and an amount... no transaction information.  I would like all the info... 

[hehehehe]

did you have a paypal debit/credit card and used it last year? did you use other credit cards from your paypal account last year? I heard, last year paypal 1099k might include those amounts.

[Smokymist]

I don't see how using a paypal debit card would have anything at all to do with what is reported on a 1099 form. It is not money you earned, it is money you spent.