Workshop - 2011 tax laws and your PayPal account

Amanda411
Moderator
Moderator

Starting in 2011, all U.S. payment providers, including PayPal will be required by the IRS to report sales information about merchants who exceed $20,000 and 200 transactions to the IRS.

 

Have a question about how the new tax law will affect your PayPal account and online business?  Please visit www.paypal.com/irs for more information.

 

Still have questions?   Join the PayPal team here on February 2nd at 2pm EST,  11am PST for a 1 hour Q&A session.

 

 Please note, while PayPal is committed to helping our customers understand the 2011 tax changes, we are not qualified to give you specific tax guidance.

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27 REPLIES 27

Addie_Emma
Member
Member

Hi

 

I'm a freelancer and one of my clients pays me via Paypal.  I will definitely hit that $20K mark by the end of the year.  My client gives me a 1099 for what she pays me.  Will I be subject to double tax on this?  How will the IRS distinguish that the $X she paid me was accounted for on the 1099?  I hope this makes sense.

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PayPal_William
PayPal Employee
PayPal Employee

Addie_Emma,  thanks for your question.  The report that your client sends you and the Form 1099-K that PayPal sends you may cover the same income.  We believe that the IRS is aware of this potential for double reporting and may have provided some guidance in this area.  You should consult a tax advisor for assistance on the tax treatment of any Form 1099s that you receive.

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PayPal_William
PayPal Employee
PayPal Employee

Thanks everyone.  Please see www.paypal.com/irs for more information about this topic.

 

Signing off,

Amanda, Meg and William

 

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PayPal_Olivia
Moderator
Moderator

Hello everyone!

 

This thread has been moved to the New and Improved Community so it will be easy to find.

 

There's lots of great information in this workshop, and at www.paypal.com/irs.

 

If you still have questions, please check out the Tax Information Questions thread.

 

Olivia

 

 

If this post or any other was helpful, please enrich the Community by giving kudos to its author, accepting it as a solution, and/or coming back to assist others. Members make this Community great!
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renegade
Member
Member

1.  So, ONLY the gross amount of payments (excluding personal payments) received will be reported along with the tax id number, name and address on the paypal account?

 

2.  Will any information about each individual transaction on the paypal account be given to the IRS - including the item(s) sold, who it was sold to or transaction number or details?

 

3.  Will the email address associated with the paypal account be given or kept private?

 

 

Thank you so much again!

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PayPal_Meg
PayPal Employee
PayPal Employee

Renegade,


1.  So, ONLY the gross amount of payments (excluding personal payments) received will be reported along with the tax id number, name and address on the paypal account?

• According to the current draft form, that is the case.
 
2.  Will any information about each individual transaction on the paypal account be given to the IRS - including the item(s) sold, who it was sold to or transaction number or details?
 
• No, that level detail will not be provided.

3.  Will the email address associated with the paypal account be given or kept private?
 
• No, email addresses will not be provided.
 
Thank you so much again for participating today!

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AprilLeigh
Member
Member

Is the threshold for reporting$20,000 AND 200 transactions, or $20,000 OR 200 transactions.

 

Thank you!

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PayPal_Meg
PayPal Employee
PayPal Employee

Hi April Leigh,

 

The reporting threshold kicks in when you exceed both $20,000 AND 200 transactions in the same calendar year.  Thanks for your question!

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