FYI- IRS is now taxing paypal and ebay

[250rmanfmf]

I just got a notice through my paypal account about the new law about the IRS taxing you through paypal. The rules state that if you recieve over $20,000 in a calender year through paypal or have had 150-200 money transactions Paypal will send both you and the IRS a 1099 Tax form. They will want your tax id number. So just a FYI for everyone that the days of selling parts tax free are coming to an end.

Just giving you guys a heads up.

Tyler

[hoosierlogger]

Figures, the government is always taking money from us, but at the same time they never have any money.

[rdlsz24]

It's $20k AND 200 or more payments received, so the average Joe won't be affected. At first they were trying to make it one or the other, but PayPal fought back (I'm sure fearing lost users) and got it to be both.

https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&fli=true&content_ID=marketing_us/IRS6050W

Rob

[Xpress]

No worries here for us average Joes. Just gotta keep the transactions on the down low...

[HuffieVA]

A 1099 is just a report of income just as if you owned a business or you were a subcontractor, in the end you are only taxed on your "Profit" in this case your cost would include eBay and PayPal fees, as well as your origonal investment into the parts, the gas to pick them up, your truck payment associated with "the business" a portion of your utilities / mortgage for your "home office", the cost of your "current inventory" which could include what you have yet to sell (i.e. the bikes/trikes you currently ride if purchased that year), additions or improvement to your warehouse/workshop (i.e. garage) etc. etc..... If at the end of the year you end up showing a loss you wouldnt have any taxible income from it, in fact as a sole proprieter (or joint if husband/wife) the loss from the business would offet your tax burden from your regular job making your overall taxable income less than it would have been in the first place. It not necessasairily a bad thing, just a pain in the neck that will lead you to think like a business instead of an individual... "reinvesting" money rather than sitting on it where it would be suseptable to taxing...

[captainweezy]

;)
A 1099 is just a report of income just as if you owned a business or you were a subcontractor, in the end you are only taxed on your "Profit" in this case your cost would include eBay and PayPal fees, as well as your origonal investment into the parts, the gas to pick them up, your truck payment associated with "the business" a portion of your utilities / mortgage for your "home office", the cost of your "current inventory" which could include what you have yet to sell (i.e. the bikes/trikes you currently ride if purchased that year), additions or improvement to your warehouse/workshop (i.e. garage) etc. etc..... If at the end of the year you end up showing a loss you wouldnt have any taxible income from it, in fact as a sole proprieter (or joint if husband/wife) the loss from the business would offet your tax burden from your regular job making your overall taxable income less than it would have been in the first place. It not necessasairily a bad thing, just a pain in the neck that will lead you to think like a business instead of an individual... "reinvesting" money rather than sitting on it where it would be suseptable to taxing...Well put.

[Headsup]

Wouldn't you be able to have the Sendies send it as a gift? Or is there no way to get around it? Not that it bothers me, I will never in a lifetime acquire 20k on paypal..

[Jerm1179]

Most people (myself included) would and or should be carefull sending it as a gift...i got ripped off here by doing that..kinda hard to argue about not recieving something when ya said you were just gifting money. I will only send as a gift if the seller is well known on the forum.