IRS transaction limit - What is a transaction?

[micha7878]

I can't seem to find a clear answer to this question, hopefully someone can help.

Within the new IRS Law where paypal has to report users that make over 20k AND 200 transactions, what would be considered a transaction?

Is it only payments received or is it all transactions?

What exactly constitutes a transaction in the eyes of the IRS?

Thank you

[alf5854]

I wish someone would answer this question as i also need the information...What exactly is a payment recieve transaction that will be reported to the IRs...will cash back fess be included?

Thanks!

[_Zazu]

Hi Micha7878!

This is a very good question and we have added a specialized help center strictly for the new IRS requirements. You can find this by going to PayPal.com/IRS.

From what I have reviewed it would show that the reporting will be based on $20,000 gross payment volume plus 200 payments received into the account.

I hope this helps

 - Zazu

[guffy1]

I really dont think the above  answers the OP's question. Clearly the OP is aware of the 20k/200 reporting limits.

He wants to know what actually constitutes a transaction against the 200 limit. $20 his brother from Arkansas sent him? Is that a transaction that counts against the 200 limit?. If Stubhub sends him a payment is that a transaction that counts against the 200 limit? Even though Stub Hub is required to send out a 1099k as well?

So many unanswered questions. I tried calling for an answer and the guy on the phone I dont think he ever even heard of the IRS. LOL

[_Zazu]

Great questions Guffy1 and I do see where I could have provided some more specifics with this process.

From what I have researched on PayPal.com/IRS incomming payments for all goods or services will go against the total payment volume and 200 transactions threshold.

Payments however received for Personal Payments will not count towards the IRS reporting threshold.

I hope this provides better insight into the process.

- Zazu

[glasscollector]

I too would like some information regarding this. Does anyone know if PayPal has addressed this issue anywhere in writing?

What constitutes a reportable transaction? Obviously the first one on the list below does, but what about the other 2?

1.  Payments received for goods or services

2. Personal transactions - money received for personal reasons

3. Paypal Debit Card Cash Back payments - we receive one of those per month. 

If anyone has a link to where I can find "set in stone" answers to my questions, I would really appreciate it.

[PayPal_Olivia]

Hi glasscollector, welcome to the forums!

Payments that are not for the sale of goods or services are not included in the calculation of gross payments received for 1099-K reporting.  If you receive payments for the sale of goods or services on eBay or off eBay, those payments will be included.

This was also one of the great questions covered in the IRS Workshop we had on February 2nd. There may be other answers there that you're looking for, so I definitely recommend checking that out.

I hope this helps!

Olivia

[guffy1]

I am wondering specifically about the Stub Hub payments I receive through Pay Pal. Stub Hub is required to do reporting for 1099-k themselves, so it seems to me that Pay Pal would not be counting the Stub Hub payments against my 1099-k total.

I dont have any problem paying my taxes, I always have. But if Pay Pal and Stub Hub are going to both report my Stub Hub payments that is going to create a very difficult situation come tax filing time. I would really like to get some clarification on these Stub Hub payments. I have tried calling Pay Pal and posting on varios forums/message boards, to no avail.

[PayPal_Andy]

guffy1, you pose an interesting question.  Here's what I came up with. While Stub Hub files their own 1099-K, any payments received into your PayPal account for goods or services would be figured into PayPal's 1099-K as well.  What I would recommend though is that you contact a tax professional to enquire if you would be able to avoid double taxing on that; I would think it'd be possible, but I am not a tax professional and I don't want to give you incorrect information.

Andy