QUESTIONS ABOUT IRS AND PAYPAL

[fashionpeas]

I cannot figure out these questions, please help.

1, I sell small things on ebay. In order to reach the 20K target, I have to sell 2000 items.

I generally sell about 100 items per month. Will I be count in the report group?

This is the most important thing to consider -- AND/OR. 20K and 200 transations, or

20K or 200 transactions will make a big difference for me.

2, When they say gross sales, what do they do for the paypal shipping fee and ebay fees?

I usually automatically pay them from paypal. Will they deduct these costs?

3, If I hit the 200 transactions or 20K limit, what will happen? Are they going to limit me right away

and ask for my SSN? If I have a business, can I give them the business ID instead? Are they going

to hold my money, since they said, they will put a restriction on paypal account, this person cannot

receive, withdraw or send money.

4, The people in the same household, who registered under the same address will be considered

as the same account holder and share the payment limit?

Your answer will be greatly appreciated!!!

[cassycan]

Okay here is what I have been able to determine from the different sources here and at the IRS. You have to reach both threshholds. 200 and $20,000. A 1099-K (the new reporting form) is about gross receipts, however it is not what taxes are based on. It will include personal money, cost of goods, shipping expense, money you refunded, merchant fees and (this one I am not sure of) paypal fees, and every other transaction from which you RECEIVE money.

When you reach the threshhold of both 200 and $20K you will be asked for one of three official ID numbers: SS#/EIN/TIN

So if you are a business you will be asked for your business ID. As an individual you can get a free TIN from IRS.gov or use your Social. In my experience I would get a Taxpayer ID number.

I understand the account will be locked until a provable ID number is in place.

Finally same household is not considered, but but same ID numbers are.

Hope that helps a little........    Start keeping records of every "business" related expense to offset the income. This would include any related expense from going to the post office to ship to the tape to seal the box.

[yfzman]

hi does anyone have any info on what obama said lastnight about removing this new tax law,he said he would agree to kill this new law but i wonder when he will sign it 

[javierrebelde]

http://money.cnn.com/2011/01/21/smallbusiness/1099_repeal_effort/index.htm

[javierrebelde]

Foreclosure Prevention Act; Title III—Revenue Provisions, Subtitle B, starting in Sec. 3091

http://www.govtrack.us/congress/billtext.xpd?bill=h110-3221

(B) EXCLUSION OF FOREIGN PERSONS- Except as provided by the Secretary in regulations or other guidance, such term shall not include any person with a foreign address.

[Misty11]

Hello fashionpeas,

Please checkout the PayPal IRS website, this may help you with all the questions you have.

Misty