What Does PayPal's New Tax Reporting Rules Mean For Sellers?

[jhoffy22]

This is nothing new at all....been in place for over a year now.

 

[BigWill]

This is why you shouldn't do business in the USA. Very risky.

 

[Rodent]

The term moral tax payer is an oxymoron and if you want to call me selfish for not wanting to pay taxes I'll take that as a compliment. If you say I have a social obligation to help everyone (altruism) I'll call you a hypocrite.

Who here lives in a democracy? Also, you're talking to a forum with vocal anarcho capitalists. :xmas-smiley-022:

Apologies. I hadn't realised that anarcho-capitalists believe everyone should keep everything they earn but should be able to consume freely and at other people's expense and where they do pay for what they consume this is actually altruism on their part.

 

[benderb0t]

Rodent, you're taking up space and distracting from useful conversation about how to deal with taxes. stfu

 

[Meatytreats]

This is so all the "work from home" people that get paid by Paypal from people like us, will be responsible for their personal taxes!

Can you imagine if I had to ask every fuckhead in the BST that I bought more than $600 in services from to give me their TaxID and address, so that my company could send them a 1099?

Ya, that would go over good!

Not to mention the fact, that Paypal is actually the one paying you. They have a legal responsibility to file a 1099 on every individual who they paid more than $600 in a year. It's no different then any other company!

 

[crackp0t]

Apologies. I hadn't realised that anarcho-capitalists believe everyone should keep everything they earn but should be able to consume freely and at other people's expense and where they do pay for what they consume this is actually altruism on their part.

I don't think you understood anything I said so I'll leave you with this.

 

[FlatLine]

Apologies. Clearly I mistook you for someone who believed in democracy!

democracy != tax code

 

[Red_Virus]

So how does this affects international sellers?

 

[Dresden14]

It means you need to make a stealth account when you've reached $19,999 in payments.

exactly this, ive gone through several..

 

[Jameel]

exactly this, ive gone through several..

 

[Fiver]

Since they now require your Tax ID # to open an account, does that make it harder to have multiple accounts?

 

[elgordo]

They've always required your tax id to open a business account.. which is required to use the Pro api for credit card processing on website front ends, etc.

Also, they started this tax reporting as an IRS requirement last year.

I feel like the fucking ambassador of PayPal up in this bitch.

 

[InternetAuthor]

I got a 1099K from PayPal last year - they were playing the game then. There was not a specific place on the IRS tax forms for the 1099K amounts though - that is the part that is new to sellers this year.

The biggest trick for most sellers/service providers is not reporting duplicate income. A company may still send you a 1099 as a contractor for services. If they paid through PayPal, you'll also see that income rolled into the big number on 1099K. So the IRS may now think you have even more income than you actually do.

Bottom line - keep super duper careful records to stay squeaky clean.

Other bottom line - to avoid the hassles (while still being totally legal), don't have more than 200 transactions regardless of income. Then you can report it just like any other small business income without the duplicate reporting issue.