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! 

[simplyalyss]

Tax ID (Tin) I don't have one I have yet to pay taxes because I've never had a job and am still a dependent in college what do I do?

[brewhardware]

A tax ID is your social security number if you don't have a business.

[Smokymist]

If you are making money, even if you are in college, then you have to report that to the IRS. It's life, unfortunately.

[tekwyzrd]

At one time I planned to list items on ebay so I have a premier account but have never sold anything on ebay or received payment for anything via paypal. Now they're demanding my social security number or tax id. If I was selling enough to require tax filing I could understand the need for tax info but I say again I have never sold even 1 item on ebay or received payment for anything via paypal. Demanding social security numbers is just inviting hackers and making identity theft easier.

[lozengallery]

Hi, I'm sorry if this has been dealt with already. There are 30 pages of info in here. There is a discrepency between what paypal reports and what I am seeing in my paypal transactions download file for 2011. I am adding up all status "completed" transactions that are of the type "payment recieved" and I am several thousand short. I have called but no one can help me. If  someon can just tell me how to filter the data to find that amount I would be so grateful. How can I add up my relevant transactions to find the amount on my 1099? Help!

[auntdine]

Is there a Paypal seller's report where I might easily find the exact amount spent for postage and UPS dollars for the entire year of 2011? I am a business seller in the US.

Thanks for any help you might offer.

[truelies]

I am asking about 1099k. I received the 1099k from paypal. But from following link:

http://www.irs.gov/newsroom/article/0,,id=249029,00.html

Irs said don't need to report it for 2011. I am confused if my 1099k was reported to IRS or not?

[Deboray]

Much to my surprise, I received a 1099k on April 7! My taxes are done and I payed on all I made, but I can't add this to my tax papers. I thought these forms were to be sent before now, plus it shows I made $2000(NOT $20000) and I had about 89 transactions!  If we have to wait on these, it will be a long while before taxes are filed and barely enough time to do it.  Seems these should have been sent much sooner and it does not follow the guidelines!

[PayPal_Frank]

Lots of great information in this thread. Thank you to everyone for helping each other with these changes. 🙂

I just wanted to post a quick update/reminder for those of you who have recently received 1099-K but had already filed your taxes.

We may have not sent a Form 1099-K in January, because we were unable to link activity in one account to other accounts listed with the same TIN (Taxpayer Identification Number) at that time. The IRS requires that we report all activity related to a TIN when the IRS thresholds are exceeded regardless of how many PayPal accounts are maintained.

In those situations, we recommend consulting your tax advisor to assess your specific situation. As long as you reported all of your income, including any reportable amounts from each Form 1099-K, there is likely no need to file corrected 2011 Federal Income Tax Returns, because taxpayers have been instructed not to enter (i.e., enter "0") any amounts reported on Form 1099-K on all Federal Income Tax returns. Therefore, your tax return will most likely not change as a result of receiving any additional Form 1099-K.

As in prior years, taxpayers must rely on their own records to accurately report gross receipts and taxable income to the IRS and state tax authorities. In the future, the data reported on Forms 1099-K may be required to be included on your Federal Income Tax return, but not for tax year 2011. In future years, PayPal will issue all Form 1099-Ks by January 31st.

We will continue to update https://www.paypal.com/irs with frequently asked questions about the tax reporting. 🙂

- Frank

[4Crawler]

Is there any reason that Paypal does not provide a simple way for it's merchants to figure out the numbers that show up on the 1099-K form for themselves?  I think all these 100's of posts on this thread all boil down to that point.  If I could figure out to the dollar what number will show up on my 1099-K form, I could care less when I get it.  But if I can't figure out that number then it matters a lot, and it will matter next year and the year after that, and so on.  For example at some point, that number will have to be entered on the federal income tax form and likely on most state income tax forms and for businesses in states that collect sales tax, on that form as well.  And while Paypal may not be sending that form to the state sales tax folks, those folks do have ways of finding out what the number is and if sales tax income not equal to what is reported on federal income tax, questions get asked.  And my state sales taxes must be filed by January 31s of every year and this is BEFORE Paypal makes the 1099-k data available to me.  So every year, I'll be in the same boat.  And I do not think I am the only Paypal merchant that pays sales taxes.

So a simple request:

Provide a simple method for your merchants to generate this 1099-K number ahead of time.  Somethine like this:

1. Wait until some date in January (when)

2. Download history file (how)

3. PERFORM SOME FILTERING ON THAT HISTORY FILE (exactly which transactions to report and which to not)

4. Total up some data to for the 1099-K number

Obviously Paypal sends this information to the 3rd party company that generates the 1099-K forms, why can't that same information be shared with Paypal merchants?