Help - How to make sure if I have met the 1099 IRS Requirements??

[jaydc]

Ok, I dont exactly run a business but this is the section that seemed most appropriate. I apologize for just joining and requesting some help, without helping people with other topics first, but this has been on my mind for a couple of weeks. I am an eBay seller, but I sell a lot of things frequently, particularly in this last year or so. I'm very new to this kind of thing though (especially the forum) so if my terminology/logic is off please feel free to correct me!

So I heard that if you recieve over 20k through Paypal (not gift/family/friend related, but for an actual transaction, lets just say all my sales are from eBay) AND have over 200 transactions, Paypal reports it to the IRS and I'm sent a 1099 form to file. I will file all my earnings and deductions, but I just wanted to know Paypals role in this.

So I went to the business portal here: https://business.paypal.com/webapps/merchantreportingweb/page/reportsHome.form and clicked on "Annual Financial Summary". I then selected 2014, and downloaded the report. This is the income report: 

http://puu.sh/acsUm/039f09e6b7.png

(It's a screenshot of the relevant portion of the .pdf report)

I can see the sales activity is, "$18,589.93", but I've sent "$1,722.96" in refunds, leaving me with the total payments recieved at $20,312.89. So do refunds "cancel out" the ladder to 20k? Or have I already hit 20k??

Also, how do I see the transactions counting against me (I know that's a horrible choice of words to use lol) towards the 200 transactions? 

What I've done so far is go to www.paypal.com, logged in, clicked on Activity, switched from All Activity to Payments Recieved, and selected the exact same dates(Jan 1st - July 15th which is today) as in the Annual Financial Summary for 2014 from the Business portal: http://puu.sh/actOb/96224f1047.png

(Screenshot confirming)

Essentially, I added up every single payment recieved transaction and got 42.

Also, Paypal considers the 20k/200 sales thingy from January 1st to next January 1st like in the Annual report, correct?? 

So, can someone who is knowledgeable *possibly* help out a newbie like me? I'd really appreciate it. 

[jaydc]

Please, can anyone help me? I know it's annoying to read the original post but I really would like an answer

[pn2682]

Payment received is what will be reported to the IRS (if over 20K). I know it is a little unfair since there are some refunds but I hope Paypal will work with the IRS to make adjustment to this. Hope that helps.

[snowshoe]

Here's some additional info:

Every retailer who accepts online credit card payments from customers will receive a 1099-K if its annual processing activity has met the following guidelines:

Through credit card companies: If the sales volume is over $600 per year

Through third party processors such as PayPal, if the volume is over $20,000 and that $20K must have been made through 200 or more transactions

If you have met these criteria, you will receive a copy of the 1099-K in the mail by January 31 of the following year. If you believe you should have received a 1099-K and have not received one by that date, consider contacting the processor to find out if it has prepared one for you. If the processor did not prepare a 1099-K, you should report your sales on Schedule C of the 1040 return and leave the 1099-K line blank

If you don’t meet either one of those criteria, then you won’t be getting the 1099-K form this year.

The 1099-K form shows your "gross sales".

"Gross sales" includes all of your selling transactions.

Refunds and fees are NOT taken out of that number.

Shipping revenue IS included. (If you're tracking your sales, that would make the number seem a bit higher than you were expecting.)

You only pay taxes on profit (revenue minus expenses), not "gross sales". Your expenses may include such things as PayPal / eBay fees, returns, refunds, shipping costs, supplies, etc. All of those expenses that you incurred last year will reduce the taxes you may owe. (Note: Both fees and returns are important for sellers to track in order to reduce taxes.)