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! 

[PayPal_Frank]

Hello everyone,

shortwheels and myfiremanishuge:

Most banks and payment processors already collect this information when you create the account.  If we wait until you meet the reporting requirements and we aren't able to obtain a tax ID or SSN, then we won't be able to adhere to the new IRS code.  We can't take that risk.

Seibertron,

You can enter your Tax ID under the Profile subtab (click on "Profile" or "More Options" in the drop down).  The option is located at the bottom of the My Business Info or My Personal Info section.

bytes85,

I would contact Customer Solutions to discuss possible options for US customers not subject to US Taxation.

- Frank

[maxmad]

Do I have to give a tax ID even though I have sold less than $20,000 in goods and services.

[PayPal_Frank]

Hi maxmad,

We may need to collect this information to ensure it is available if a customer reaches the $20k volume and 200 transaction per year reporting thresholds.  If we wait until after those reporting thresholds are met and we're unable to obtain an SSN or tax ID, then we wouldn't be able to adhere to the new tax code.

Thanks for using PayPal! 😄

- Frank

[hpepper38]

I would like to make sure about this: I both sell and buy using paypal. Sometimes as a buyer I got refunds from sellers for defective or unreceived items. Will those transactions be counted in the 200/20k transactions? I think it shouldn't, but not sure how paypal does the calculation.

[PayPal_Frank]

Hi hpepper38,

That's a great question.  🙂  Refunds will not count towards your gross payment volume for the sales of goods and services.

Learn more about the reporting thresholds here: http://www.paypal.com/irs

- Frank

[mandysaurus_rex]

Ok so I know for a FACT that I wont make that 20k mark.

I'd be lucky to hit 5k-8k.

And I am sure I have or will meet the 200 payments though.

My question is, do I HAVE to file for the IRS Tax thing?

Cause I do not feel comfortable putting my SS# out there

and I have no other tax ID number of any kind.

[bsm]

I have the exact same problem.  I do not want to give PayPal my SS number and I also know that I will not have $20K in sales (far less) but will have 200+ small dollar transactions.  Will they cancel our PayPal account if we don't comply and give our ss number?

[mandysaurus_rex]

I hope not. And they shouldn't do that.

I mean, it's not like we will get taxed anyways. So why should we have to.

I hope someone answers soon. I'm tired of getting the emails about it, and I'm worried the system will robotically ban my account 😕

I'd be very **bleep** if that happens

[PayPal_Andy]

mandysaurus_rex & bsm-  First off, mandysaurus, gotta say I like the handle. Very nice 😄

Now as far as addressing your concerns, let's do that.  If our system sees that you are approaching the thresholds where we need to report for the IRS, we do require either your SSN or Tax ID.  This is because, if you happen to suddenly get one big payment (maybe really big) or a couple quick transactions that put you over the limit and we don't have that information on file already, there's going to be some difficulties.  So yes, if we're asking for that information and you don't provide it, we will very likely limit your account access until we collect that information.  Realize, it's not that we want this information, it's the the government is telling us we have to have it.

And while I can understand the hesitancy in providing such sensitive information, realize that PayPal has never been compromised.  No one has rooted around in our systems collecting information we don't want them to have.  All of that information is kept very secret, so secret in fact that once you enter it into our systems, you can't even see it again.  And finally: Technically, all of your income should be taxed by the government, so you're already paying the taxes, right? 🙂

Andy

[misrule]

thanks for answering the security question, but I am more concerned about reaching the 200 transaction limit. I won't hit the monitery cap they put in place but what happens when I go over the 200 transaction threshold. Do I just stop using eBay till the beginning of the year and just quit selling. That is where I am at right now. I have stopped selling for now becuase I don't want to get hit at the end of the year by the taxman.