PAYPAL 1099-K

[Rat Rod]

Anyone else get a notice that they have the dreaded 1099-K waiting for them at PayPal? :x

As required by the IRS, we've prepared a Form 1099-K for you. This form summarizes the gross payments you received through PayPal for the sales of goods or services during 2011. This form is available on PayPal.com.

Here's how to view and print your Form 1099-K:

Log in to your PayPal account.
Select History > Tax Documents.
You will also receive this form in the postal mail soon, if you haven't received it already. We send this information to the IRS as well. If you reside in California, Hawaii or New York, we also report this information to your state's tax authority.

If you need more information, see New Tax Law for Online Sellers.
Sincerely,
PayPal

 

[user 135]

You must be a heavy seller to receive one of those. Do they subtract out the fees from the figure?

 

[Rat Rod]

The thing that is confusing to me is that they have included my payments for the Ebay banner ads on the site...which Ebay automatically deducts taxes from each month before they pay me.

I guess I need to call them because it looks like they just lump everything into this deal no matter where the money comes from.

 

[kingfish254]

They have been prompting me for this for a while, but you only have to provide a Tax ID number if you process more than $20K through PayPal a year. I don't, so I ignore the message from them.

 

[Rat Rod]

I called them about this and they said that all PayPal users will have to supply a SSN or tax ID otherwise their accounts will eventually be frozen.

They said that the $20k mark was for whether or not they send the info to the IRS. If you don't receive more than $20,000 in payments for a year then they won't file with the IRS, but they still need your info.

 

[kingfish254]

Thanks for the clarification.

 

[KJV]

yet, another reason i don't use paypal.

 

[clerkkent]

Is the paypal for all of your businesses, or just this website? It may be wise to have separate paypal accounts for your various business uses.

 

[Rat Rod]

Unfortunately I have one account for everything.

The other bad thing is that I was paid for some unrelated things via PayPal last year that contributed to me going over the limit. It wasn't related to Ebay or this site so I learned my lesson about using PayPal for everything.

On the bright side, we have a friend who is a CPA who does our taxes for us every year so she usually tells me what to do.

 

[outskirtscustoms]

Paypal, Ebay, and the IRS. Three companies that will take your money for reasons we can't understand but we for some reason accept it. :roll:

 

[axsepul]

i will have to look into this

 

[Rat Rod]

I just got off the phone again with the folks at PayPal and the phone rep confirmed that in 2012, every single PayPal user will have to supply their SSN or a tax ID in order to use the service...no matter how much you receive in payments.

I also found out that every single payment transaction that you receive will be contributed towards generating a 1099-K form. So even if you are receiving a gift from someone, it will still be recorded as income.

 

[KZ1000]

This only involves Paypal transactions, Ebay items that are paid by check/mo/cash on pick-up are not subject to this right

 

[partsguy]

Paypal was the best thing to happen to the government. Can you really blame them? We gotta pay for all these entitlement and welfare programs, bank bailouts, GM bailout, cash for clunkers, ObamaCare, and meddling around in the world's affairs.

 

[partsguy]

If you sell stuff through eBay or Paypal, times just got harder for you. Not only do you pay FeePay for shipping costs, but you are taxed for it once you get the money to ship out the box.

 

[Rat Rod]

This only involves Paypal transactions, Ebay items that are paid by check/mo/cash on pick-up are not subject to this right

They only track PayPal payments.

PayPal is required by the IRS to file a 1099-K if you receive payments via PayPal for more than $20,000 and over 200 transactions in one year.

Seems like a big number, but you'd be surprised how quickly it adds up if you do a bunch of business online.

 

[Rat Rod]

BTW...while doing more research and talking to the folks at PayPal...payments that are designated as "Gifts" are NOT included in your annual payment totals.

 

[kingfish254]

BTW...while doing more research and talking to the folks at PayPal...payments that are designated as "Gifts" are NOT included in your annual payment totals.

Last year PayPal sent me a note telling me that if I continued to receive "GIFT" payments for actual goods, that they would suspend my account.

 

[rico]

Last year PayPal sent me a note telling me that if I continued to receive "GIFT" payments for actual goods, that they would suspend my account.[/quote]


that's what happend to me !, so no more paypal :mrgreen:

 

[partsguy]

Well, what do you expect? Paypal and eBay are one in the same and they gotta make their billions-even at the expense of us.

I'd like to see if these CEO's and marketing people can succeed for very long if THEY were the ones using the sites and THEY were the ones paying the fees and taxes. Wonder if any of them would still be profitable after about 4 or 5 months?