PayPal & Income Tax Question

[drcy]

I use my PayPal $$ in my taxes. I go through and itemize what counts and what doesn't as income. You report and individualize what is income and what is not. Obviously, I don't report on my annual taxes a transfer to PayPal from my own bank as profit.

Duly note that I have a state business license and already report quarterly for state sales taxes, so that itemizing is largely already done anyway when Federal taxes role around.

No, rarely would all of someone's money deposits in one's personal PayPal count as income. As I said, many people regularly transfer their own bank funds into PayPal. The IRS would understand that.

Also note that PayPal does specifically identify direct bank account transfers as its own thing in the listings-- after all, you do the transfer via PayPal on the PayPal site--, so might not even count that towards the $20,000 anyway. My bet is they don't count personal bank transfers towards the $20,000.