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. 

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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_Andy]

misrule-  More than happy to answer that for you.  You need to hit both thresholds before the reporting begins, so if you've only hit the 200 transactions, but you're not going to hit the $20,000, then you'll be fine.  We may still request the information, but we only have to report those who hit both.

Andy

[Canyonair]

What is the reporting period? For example is it for payment transactions received between 1/1/2011 and 12/31/2011? When does it reset for 2012?

[highendcustoms]

So you are saying that Paypal will NOT report this if the 20K threshold is not met.  I think I am at 8K.  So nothing will be sent to my home?  I am generally gone in January / February and do not need to miss an important document.

Thank you.

[PayPal_Frank]

highendcustoms,

That's correct.  If you have not received $20k in gross payment volume AND 200 transactions in the 2011 calendar year, we will not be sending you a 1099k.  Like Andy said before, we may request a SSN or Tax ID even if you have not met the thresholds. If a customer meets the thresholds and we don't have that information to report.... that wouldn't be good. 😞

- Frank

[scrappingbuddie]

I have the same problem and  feel the same way about putting my SSN out there.  But can not get anyone At paypal to even verify that I don't meet the requirements (20,000) or to answer the questions about why I should provide my SSN.  Did anyone ever answer your question?

[AngelSpeaks]

You can download the SS4 form from the IRS website and get a federal tax ID number.  This is the best way to go, because then you don't have to give out your social security number.

[Canyonair]

I would like to know what the reporting period is for PayPal's reporting to the IRS under this new tax law. For example is PayPal reporting payment received transactions from 1/1/11 to 1/1/12? and than all transactions are reset to zero? Just would like to know.

[PayPal_Frank]

Hi Canyonair,

The reporting period is a calendar year.  Gross payment volume and number of transactions will be calculated between and including January 1st, 2011 to December 31st, 2011.

You can learn more about the new IRS reporting code here: https://www.paypal.com/irs

You can view an example copy of the IRS 1099K form here: http://www.irs.gov/pub/irs-pdf/f1099k.pdf

I hope this information helps! 🙂

- Frank

[billyduncan04]

Do the tax laws go from Jan 1 through Dec 31st or are they over any 12 month period between 2 years? I at at my limit for last year and don't want to start this year without knowing. Any help would be great.

Thanks,

Billy

[brewhardware]

The tax cycle is calendar year. Begins 1/1/12.