OT: IRS Paypal Tax Situation

[yanks12025]

I just want to Make sure, so you only get tax papers if you do over $20,000 and 200 transactions?

[bxb]

Originally Posted by yanks12025

I just want to Make sure, so you only get tax papers if you do over $20,000 and 200 transactions?

Correct, must meet BOTH criteria.

[birdman42]

Originally Posted by bxb

Correct, must meet BOTH criteria.

Important as a collector to track these 2 parameters during the calendar year and consider shutting down your ebay transactions if both are getting close to the annual limit.

Well, I suppose if your intent is to not report the income.

Bill

[ALR-bishop]

Ducking taxes is not nearly as nefarious as shill bidding

[Snapolit1]

Thanks Bob for all this great information. Good to know. And I didn't know it.

[mybuddyinc]

Thanks everyone, especially Bob, for very insightful and helpful info.

I'm going to contact an accountant and go from there. I'm sure I can prove expenses, and see where I stand.

I will update when I have more information, as I think this is important to many of us.

Not so much Not Fun, Scott

[maximus35]

So if you do over 200 transactions and spend over $20k (buying cards not selling) you do not have anything to worry about, correct? ITs only if your selling cards?

[Batpig]

I'm looking at a similar circumstance, however I'm selling for my dad using my paypal/eBay. I'll get the 1099, but will I just report an equal amount paid out as consignment somehow? Do friend and family transactions count toward that limit?

No good deed goes unpunished...

[birdman42]

Originally Posted by yanks12025

I just want to Make sure, so you only get tax papers if you do over $20,000 and 200 transactions?

To clarify the discussion here (or maybe muddy it), there are lots of different "1099" forms. There's 1099-INT used to report interest income, 1099-DIV for dividends, etc. The 1099 of interest here is the 1099-K used to report credit card transactions. (Another in the 1099 series is the 1099-MISC. That's the form that's issued for contractor work, rental income, etc.)

PayPal will issue you a 1099-K, not a -MISC. Here's the threshold for issuing the document, quoting from the IRS instructions for the form:

Exception for de minimis payments. A TPSO [third-party settlement organization; that's PayPal] is required to report any information concerning third party network transactions of any participating payee only if for the calendar year:
The gross amount of total reportable payment transactions exceeds $20,000,
and
The total number of such transactions exceeds 200.

However, I've seen 1099-Ks issued to people who were under that threshold. Uber and AirBnB, for example, send the doc to anyone who has any payment run through them.

The amount on the 1099-K shows the gross amount of the transactions. It's up to you to keep track of any fees.

As has been stated earlier, it's your responsibility to report all your income, from whatever source. Even if the money comes to you as cash or check, it's still reportable income.

Bill