I'm confused by what's considered taxable when using Paypal for payments and want to make sure I'm not violating any rules with the IRS.
Couple questions:
PayPal's website states "if you receive over $20,000 AND 200 transactions" you're taxed on those payments.
1) What does that mean? Does that statement mean that you have to meet both objectives to receive a 1099-K (i.e. You must have over $20,000 and must have over 200 transactions)? More specifically, if I do 500 transactions but only receive $10,000 in payments am I required to file a 1099-K?
2) Using the same question above, are you only taxed if you have a Business account or does it also apply to a Personal account as well?
3) How does receiving payments via the "Friends and Family" option factor into whether or not you're taxed and required to file a 1099-K?
4) Lastly, I'm assuming that if I am required to pay taxes on payments received that PayPal would send me documention via the postal service like banks do at the end of the year correct?
