paypal tax reminder

[The Vector Doctor]

Just a reminder for those of you that use paypal. As of this year, there is no hiding behind this form of income

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

If you have over 200 transactions and $20,000 in sales from paypal

This went into effect January 2011

 

[Locals Find!]

Just got off the phone with paypal concerning this. They will notify you if you get close to the limits set by the IRS for reporting well in advance of them reporting. If they didn't notify you. You don't have to worry just yet.

 

[Gino]

Does this mean.... up until now, you didn't have to report your earnings using this pay method ??

 

[Techman]

no, up to now. Obama didn't demand that Pay Pal turn you in.
You were supposed to report it. Now you are reported and you report it.

 

[Locals Find!]

Does this mean.... up until now, you didn't have to report your earnings using this pay method ??

Up until now it was voluntary like reporting cash transactions. Your legally supposed to do it. Just no one was checking up on you before now.

 

[The Vector Doctor]

Just got off the phone with paypal concerning this. They will notify you if you get close to the limits set by the IRS for reporting well in advance of them reporting. If they didn't notify you. You don't have to worry just yet.

I have yet to receive any notification and I am above this number. So unless this is done after Dec 31st, I would not rely on it and think you are safe

 

[Gino]

Okay, so if you do $9,000 in paypal and only 90 transactions..... are you in a grey area ??

I thought one's duty was to report everything they made ?? Seriously !!

I can honestly see not reporting some $11.00 transaction where someone bought a scrap piece of plastic from you, but really..... voluntarily ??

Sounds like a double-edged sword. More taxes collected and more jobs created in the government to enforce this regardless the size or how many transactions take place.

 

[gnemmas]

I believe it is a new requirement starting 2012. Not just paypal, all credit card processors are required to report when exceeding that threshold. Kind of like 1099.

 

[phototec]

Come-on guys, you have to do your part and report every cent you make to help the Government make more money.

They are borrowing TRILLIONS of dollars from the Chinese and then turning around and giving them Millions in foreign aid.

It's every-ones duty to make sure this kind of business continues, it doesn't matter that China have enough money to loan the US Trillions of dollars, we still need to give them foreign aid, right?


So, I ask you to claim every red cent you make, regardless if PayPal notifies the feds or NOT.

 

[The Vector Doctor]

Yeah I claim it all. I would be too nervous not too. Paypal is a significant source of income

 

[The Vector Doctor]

I am not sure why the threshold is $20,000. Why not $1000?

 

[TyrantDesigner]

it's 200 transactions AND $20,000 to be required to be reported to irs. If I remember correctly from my accountant a few years ago .. he basically ment that with an excess of both (not one or the other) you are taking regular payments as income. Generally over $10k and you should report it anyways ... don't want to end up like Al Capone.

 

[Locals Find!]

The paypal representative I talked to said they will be reporting starts in 2012. If you exceed either number they have to report it.

They told me that all banking institutions and payment processors now have this requirement. Paypal's reporting system is a year behind. Right now you can only pull your 2010 reports. In 2012 you will be able to pull your 2011 report.

When logged into your paypal account click history and on the drop down menu select Tax Documents (4th option from the top) to get your appropriate documents. Currently the lastest year available is 2010 (at least on my account)

 

[ddarlak]

hiding simply means cheating, if your dumb enough to try it, sooner or later you will get stung.

do your business correctly and pay the piper and you'll have less stress in your life....

 

[The Vector Doctor]

The paypal representative I talked to said they will be reporting starts in 2012. If you exceed either number they have to report it.

They told me that all banking institutions and payment processors now have this requirement. Paypal's reporting system is a year behind. Right now you can only pull your 2010 reports. In 2012 you will be able to pull your 2011 report.

When logged into your paypal account click history and on the drop down menu select Tax Documents (4th option from the top) to get your appropriate documents. Currently the lastest year available is 2010 (at least on my account)

From the page I linked to....

"The IRS changes apply to all payment providers, including PayPal and include all sales that occur on or after January 1, 2011, with the first reports going to the IRS in early 2012. Our goal is to help PayPal sellers understand and comply with the new requirements."

My guess is the reason 2011 is not showing up on our paypal page is because 2011 is not over with. They cannot total 2011 when it has not ended yet

My understanding is that they have kept track since 1/1/2011 and instead of you reporting the income yourself, paypal is obligated to provide the information to the IRS

Either way, I am reporting as it should be

 

[visual800]

screw the us government, I dont think giving money to an institution that doesnt know how to manage it is a good idea. They can all go str8 to hell. they take and take and take. and will continue to take. I pity the fool that reports 100% of everything he makes

 

[binki]

are not all cc processors going to report to the irs?

 

[Locals Find!]

are not all cc processors going to report to the irs?

Yes, all financial institutions are required to do this. That includes credit card processors, check cashing businesses, and any other form of payment processor.

 

[gabagoo]

screw the us government, I dont think giving money to an institution that doesnt know how to manage it is a good idea. They can all go str8 to hell. they take and take and take. and will continue to take. I pity the fool that reports 100% of everything he makes

I pity the fool who publicly says that he does not pay the IRS!!! lol

on another note, just out of curiousity, is it harder for the IRS to find transactions done through PayPal? I don't really understand the difference between someone paying you by cheque or Visa or PayPal. If you seriously wanted to hide the transactions it can be done I suppose, but I do like to sleep soundly at night....and oh yea, I live in Canada!!
You think you pay to much tax, c'mon up for a visit...see how far your buck goes here.

 

[The Vector Doctor]

screw the us government, I dont think giving money to an institution that doesnt know how to manage it is a good idea. They can all go str8 to hell. they take and take and take. and will continue to take. I pity the fool that reports 100% of everything he makes

so you aren't concerned about an audit?