Upgrading to a Bussiness account and taxes

[Heather30]

Ok so I'm a small time seller, thinking about upgrading to a bussiness account. I sell less than 20k per year, and less than 200 transactions. But since it's a bussiness account is Paypal required to report that to the IRS? Also if I upgrade to a bussiness account what steps does Paypal take to verify the bussiness? Thank you if you can help

[snowshoe · Accepted solution]

All of your transactions are reported to the IRS however, you will only get a 1099 if you meet the criteria - if the volume is over $20,000 and that $20K must have been made through 200 or more transactions.  Note, you're still responsible for your own taxes even if a 1099 is not issued.   PayPal will ask for your business EIN and/or your SSN and possibly some additional info. 

For example, we had to provide our business EIN first, then when we applied for PayPal Here, we also had to provide an SSN, photo ID and a copy of a utility bill that showed our business physical street address.  From experience we've learned that to ensure things go in the right direction, make sure that you link and confirm a bank account and credit card - the card serves as additional proof of ID and your backup funding source.  Once you get through all the hoops, you should be ready to go.

[MelanieOjibwe]

Can someone explain what exactly comes as a benefit of the business account besides having your business name visible instead of your personal name? I cannot seem to find a simple run down of a business account's characteristics anywhere on paypal.