Do I need to pay taxes on a personal PayPal account if I receive over $20k?

cmmaquino
New Community Member

I have a personal Paypal account that is not set up as a business account which is used for selling used items from my home as I would at a garage sale.  This account also receives money from friends.  If I reach over $20k on this account from friends and ebay sales will I be taxed?

 

 

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3 REPLIES 3

DPCreations
Frequent Advisor
Frequent Advisor

PayPal does not withhold taxes.

You are responsible for filing your accurate income with the IRS using 1040 form and all neccessary supporting forms.

If you buy stuff and then resell you are running abusiness and you need to complete IRS form1040C to determine your profit or loss and then report that on 1040.

Filing your taxes has nothing to do with a 1099-K from PayPal.  

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Whac-A-Mole
Frequent Advisor
Frequent Advisor

Paypal wil send you a 1099 if your payments received under goods and services come to 200 transactions AND $20,000.

payments under friend and family are excluded.

also you have to deduct any sales tax collected,refunds ,the amount on 1099 is gross.

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Whac-A-Mole
Frequent Advisor
Frequent Advisor

IRS understands selling items from your house used or old are mostly sold at a loss,so if you do report income/loss,you could show a loss from such sales,not to mention you have oodles of deductions from expenese like travel,shipping,materials ,fees 

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