Why did I receive a 1099 from paypal for 2021?
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showing 7 transactions for a total of $625? With one for a "friend & family" transaction It appears, that paypal is sending out 1099 for ff transactions which are not involved in any type of sale. My grand daughter also received one and she did receive several ff gifts.
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
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Check your States Laws in some states $600.00 is the limit for PayPal to send out 1099's.
Don't ever send people money via PayPal, Zelle, Venmo...Once they receive over $600 in gifts or reimbursements, they will receive a 1099.
If your granddaughter's gross income is less than the standard deduction, she doesn.t need to file income taxes.
Instructions for payee. "You have received this form because you have either: (a) accepted payment cards for payments, or (b) received payments through a third party network that exceeded $20,000 in gross total reportable...etc..etc (200 transactions).
It appears I fell into (a), so therefore, if you have a credit card tied in with your paypal account and received payments via friends and family, you will received a 1099? Am I correct in assuming that? If so, what are the drawbacks in removing the cc tied in with your paypal account?
Refer all PayPal questions to @ErrorsOnCoins
It says “ you have accepted payment cards” that doesn’t say anything about you having a payment card.
This does not affect me, but for those of you buying and selling, what happens if you buy something on eBay and pay for it with Paypal, receive the item and return it for some valid reason, and then receive a refund from Paypal. Will that refund be lumped in with other monies received from Paypal, and thus be reported on a 1099 as taxable income to you?
It appears, if some one sends me funds via a cc, I'm part of the (a) category? However, if funds received are from existing balances or from a checking account, would that eliminate the 1099 criteria?
Refunds are in a separate category on PayPal.
It would eliminate (a) not (b).
Great googly, this is getting messy... 1099s sent just for sending someone a few hundred dollars? I hope GPay doesn't start that nonsense!
This scenario will be my fun one. I hope I took in enough through other means not to have to worry about it.
I have 2 ebay and 2 paypal accounts. For my lesser ebay account I have a paypal account linked to it that is not linked to my bank. I ended up selling quite a bit on my lesser account. So I would transfer the money to my paypal account which is linked to a bank.
I mention this because I have a good friend who is a dealer. He would withdraw 5 figures out of his account for almost every show he went to. Then he would deposit it back if he didn't use it. The IRS flagged him on his deposits. It took him years and a bunch of lawyer bucks to get it straightened out.
The IRS was treating it like income.
I am sooo glad I'm not a dealer.
Coinlearner, Ahrensdad, Nolawyer, RG, coinlieutenant, Yorkshireman, lordmarcovan, Soldi, masscrew, JimTyler, Relaxn, jclovescoins
Now listen boy, I'm tryin' to teach you sumthin' . . . . that ain't no optical illusion, it only looks like an optical illusion.
My mind reader refuses to charge me....
In your eyes, or the eyes of the IRS?
Suppose you and your spouse have separate accounts, ANY amount of money you sent to your spouse via paypal FF is non- taxable. And any gift you give or receive up to 15,000 a year is not reportable and non-taxable . Anyone know how to deal with that hot mess on a tax return?
Commems and Early Type
Contact the IRS.
Form 709, perhaps?
Both, it must be a nightmare.
Coinlearner, Ahrensdad, Nolawyer, RG, coinlieutenant, Yorkshireman, lordmarcovan, Soldi, masscrew, JimTyler, Relaxn, jclovescoins
Now listen boy, I'm tryin' to teach you sumthin' . . . . that ain't no optical illusion, it only looks like an optical illusion.
My mind reader refuses to charge me....
I realize, that the $600 threshold is in place for 2022, but there was no indications, that I'm aware of, that deposits made in 2021 to a paypal account, whether it was via the friends and family or auction option, would generate a 1099K,
Actually, it's pretty easy. It's only a problem for people who are acting like a business but pretending they aren't.
A company can issue a 1099 anytime they want. The threshold triggers a requirement to issue one.
I should just quit paying my taxes. By the time they throw me in jail they can pay for my diapers.
Spoken like the dealer that you are. Unfortunately, your comment is not applicable to a great number of ebay sellers, who peddle their "worn out shoes or pet rocks" as a means to make a few bucks.
You’ve likely since received an email that the form was sent to you in error.
Choice Numismatics www.ChoiceCoin.com
CN eBay
All of my collection is in a safe deposit box!
Yup. The IRS wants that 15.3% self-employment tax as well as the tax on any net profit.
Coinlearner, Ahrensdad, Nolawyer, RG, coinlieutenant, Yorkshireman, lordmarcovan, Soldi, masscrew, JimTyler, Relaxn, jclovescoins
Now listen boy, I'm tryin' to teach you sumthin' . . . . that ain't no optical illusion, it only looks like an optical illusion.
My mind reader refuses to charge me....
Seriously? You've always been responsible for reporting income and paying taxes. You've always been responsible for reconciling transactions. If you don't it's always all been considered income.
Just do what the tax pros do. Create a worksheet documenting your calculations, provide copies of the documentation. Label it clearly - US IRS 1040 Line 17 Worksheet for NAME (SSN).
Oh, and don't wait until the last minutes - you'll have to file on paper. This is why the tax returns for big partnerships run to 1000s of pages.
The IRS will scan and OCR your return and feed it into the giant maw. Along with all of the documentation they receive, including the 1099 you receive. The computers will match documents and kick out any anomalies over some threshold at some point, which gets you a letter. You respond to the letter with a copy of "the worksheet attached to the return for US IRS 1040 Line 17". That's probably the first time a human sees it. If they like what they see, they close out the file.
ANA 50 year/Life Member (now "Emeritus")
You can lead a horse to water...
IRS backlog is currently 19 million unresolved problems from last year, we may all be dead when they catch up.
Have not....
I was responding specifically to someone who said it must be hard to be a dealer. Your comment is, therefore, a non sequitur.
Peddling worn out shoes yield no taxation as they are sold at a loss.
Can you lead a recalcitrant horse to water? It is seemingly impossible.
If you sell enough worn out shoes and pet rocks at a loss you still get a 1099-k.
Yes you do. But you don't pay tax on the gross amount. There are a number of ways you can reconcile the 1099 as nontaxable income. See @BStrauss3 comment above.
People are making a proverbial mountain out of a mole hill.
I just read all that 💩. I wouldn’t do all that 💩 for the amount I’m talking about not even the $1000 they took me for and they probably count on that.
Your choice.
Yep. That link above is interesting. They don’t want you to pay tax on the $500 ten year old couch you sell for $200 but may need that 10 year old receipt and costly paperwork to file on that and all the basement accumulation you sell. This will theoretically add 8 billion over 10 years or they could get billionaires who find every way not to pay a penny and get that 8 billion in a year. Let’s see 30 trillion dollars debt today. 8 billion over 10 years minus the cost to implement is chump change.
This is just WRONG on many fronts.
I pay my sales taxes when ordering online.
Paypal gifts should be off limits and I can understand some maximum, but $600 is ridiculous.
“In matters of style, swim with the current; in matters of principle, stand like a rock." - Thomas Jefferson
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I had a small mail-order business (not coins) in the 1990s. Schedule C isn't all that complicated. Once you get Schedule C completed, you'll need to do Schedule SE to figure your self-employment tax (15.3%) on the business's net profit. You should keep complete detailed records. Use a tax professional if you don't feel confident with the tax issues. I got out of the business after figuring something out one year - as close as I could figure it, I ended up with something between $6 and $7 an hour after taxes for all the time & effort I put into it. It took a lot of time & just wasn't worth it.
Another factor to keep in mind if your small business nets substantial income. If your tax withholding at your day job is set up to come pretty close to your tax liability, the income from your small business may make it necessary for you to submit quarterly "Estimated Tax Payments" to the IRS to avoid coming up way short at tax time. Here again, using a tax professional is good advice.
Coinlearner, Ahrensdad, Nolawyer, RG, coinlieutenant, Yorkshireman, lordmarcovan, Soldi, masscrew, JimTyler, Relaxn, jclovescoins
Now listen boy, I'm tryin' to teach you sumthin' . . . . that ain't no optical illusion, it only looks like an optical illusion.
My mind reader refuses to charge me....
It now appears, that ebay has mailed out thousands of 1099K's to customers that did not meet the 2021 threshold.
when I inquired why I was issued one...the following was their response:
"I'm sorry about this. To set a proper expectation, we have a system issue regarding for this 1099k form that was being sent to our sellers who did not meet the parameters. No worries about this (insert first name), we are already fixing this. Rest assured, as soon as possible this will be fix. I'm do apologize for this one."
It appears to be a system issue, but the cs rep. could not give me an idea when it will be fixed
These where mailed out, unlike the paypal one that was available online via download.
What does sales tax have to do with capital gains?
It really doesn't matter whether they mail it or it's downloaded. It only matters if it was sent to the IRS.
please provide the link for that quote, I need it to show a client
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