Form 1099 from PayPal for IRS tax purposes.

bobbyw8469

Got an interesting letter today from the IRS. I had to pay a professional to do my taxes this year thanks to Obama/Ebay wanting to tax Ebay sellers. Well, PayPal never sent me the 1099 through the mail (you had to go to their site and download it). Well, the IRS sent me a letter wondering where I got my Ebay figure from (seems that PayPal never sent the IRS the 1099 info either). Apparently, PayPal couldn't afford the .45 stamps to mail their millions of users their 1099s nor could they afford to mail the IRS the info either. Not that I am one to skirt the system, but would the IRS have even found out about the Ebay sales, since PayPal never reported it to them?? Seems like a bunch of tail wagging and noone really knowing what is going on....

brendanb438

Most folks got their 1099Ks mailed to them via USPS from PayPal and also sent to them online.

Not sure why you didn't. What would have probably happen is the IRS wouldn't have noticed anything at first if you didn't submit info on the PayPal payments received. Then sometime in the next 2 or so years the IRS would go back and audit PayPal in some manner, find out PayPal missed reporting some people correctly to them, then they would have went through each of those person's returns to see if they were straightforward with their PayPal dealings or not and then proceed to rape those who didn't come forward at first with that info.

F PayPal, F eBay, and FFFFFFF the IRS. It is pure BS that those of us who try are hardest to earn extra money have to support so many deadbeats in this country and continue to pay into a .gov that only wants to grow and grow like a sick disease.

I would hide it from the IRS if I could, I don't believe income tax in its current form is right or legal but I am just a tax slave to the system. The best $300 I ever spent this year was with the CPA who did my taxes, with write offs she damn near wiped out my profits from eBay completely.

gemint

I hear you. For those of us selling on eBay part time to augment our collections, it's a pain in the you know what. Who wants to become an accountant to track the cost basis of our collections, especially for cards we bought years ago with no paperwork to support them. They'll assume I got my 1969 set for free even though I paid thousands to acquire those cards. Then add in eBay's headaches of requiring us to ship items the next day and it's getting to be not worth the hassles any more. I can see them going after the big sellers moving hundreds of thousands of dollars in product each year. But going after the smaller sellers is akin to sending IRS agents out to yard sales to collect up the $15 in taxes due from all those 25 cent book sales.

jeffcbay

Obama?

"Buried deep in the Housing Assistance Act of 2008, enacted with the intent of recovering the Internal Revenue Services lost revenue and supported by the Bush administration, is a new law that will require all third party sales transaction companies to report all members whose sales total over $20,000 annually and whose annual individual transactions exceed 200. The good news is that it will not go into effect until 2011 giving merchants time to prepare."

gemint

<< <i>Obama?

"Buried deep in the Housing Assistance Act of 2008, enacted with the intent of recovering the Internal Revenue Services lost revenue and supported by the Bush administration, is a new law that will require all third party sales transaction companies to report all members whose sales total over $20,000 annually and whose annual individual transactions exceed 200. The good news is that it will not go into effect until 2011 giving merchants time to prepare." >>



They all suck in my book.

brendanb438

<< <i>Obama?

"Buried deep in the Housing Assistance Act of 2008, enacted with the intent of recovering the Internal Revenue Services lost revenue and supported by the Bush administration, is a new law that will require all third party sales transaction companies to report all members whose sales total over $20,000 annually and whose annual individual transactions exceed 200. The good news is that it will not go into effect until 2011 giving merchants time to prepare." >>



Obama and the Dems are just as guilty, he had two years where he could have reversed this law but did they?

Really though both parties suck and are nothing but vampires trying to suck the life out of us to get .gov to grow bigger and bigger while more and more folks live off the .gov tit.

jeffcbay

I agree, but let's discredit where discredit is due.

addicted2ebay

The new 1099 rule sucks, I fell like I am buying and selling stocks. WTF it's Sport's cards! I got one in the mail it has turned me off from trying to sell for a profit. I do collect but if I see a nice deal I will try to flip it for a profit. With ebay,paypal,usps, & now uncle sam it's not worth it.

JMDVM

<< <i>Most folks got their 1099Ks mailed to them via USPS from PayPal and also sent to them online.

Not sure why you didn't. What would have probably happen is the IRS wouldn't have noticed anything at first if you didn't submit info on the PayPal payments received. Then sometime in the next 2 or so years the IRS would go back and audit PayPal in some manner, find out PayPal missed reporting some people correctly to them, then they would have went through each of those person's returns to see if they were straightforward with their PayPal dealings or not and then proceed to rape those who didn't come forward at first with that info.

F PayPal, F eBay, and FFFFFFF the IRS. It is pure BS that those of us who try are hardest to earn extra money have to support so many deadbeats in this country and continue to pay into a .gov that only wants to grow and grow like a sick disease.

I would hide it from the IRS if I could, I don't believe income tax in its current form is right or legal but I am just a tax slave to the system. The best $300 I ever spent this year was with the CPA who did my taxes, with write offs she damn near wiped out my profits from eBay completely.

>>



Right on! I kept my sales under $20k and refused to give Paypal my Soc#. My accountant, who is also a collector, said that the IRS postponed the requirement for the 1099K for 2011. Has any one else asked their accountant this?

jeffcbay

I only received $4600 in Paypal in 2011, so I'm straight. It's still just a hobby for me. I'll never come close to the $20k mark. If I ran my ebay sales like a small business, I suppose I should pay the proper taxes as any small business should. Besides, any decent tax preparer can figure out enough tax shelters so that it doesn't make a difference in the end. The richer you are, the better your accountant is at skirting your proper tax amount.

brendanb438

<< <i>

<< <i>Most folks got their 1099Ks mailed to them via USPS from PayPal and also sent to them online.

Not sure why you didn't. What would have probably happen is the IRS wouldn't have noticed anything at first if you didn't submit info on the PayPal payments received. Then sometime in the next 2 or so years the IRS would go back and audit PayPal in some manner, find out PayPal missed reporting some people correctly to them, then they would have went through each of those person's returns to see if they were straightforward with their PayPal dealings or not and then proceed to rape those who didn't come forward at first with that info.

F PayPal, F eBay, and FFFFFFF the IRS. It is pure BS that those of us who try are hardest to earn extra money have to support so many deadbeats in this country and continue to pay into a .gov that only wants to grow and grow like a sick disease.

I would hide it from the IRS if I could, I don't believe income tax in its current form is right or legal but I am just a tax slave to the system. The best $300 I ever spent this year was with the CPA who did my taxes, with write offs she damn near wiped out my profits from eBay completely.

>>



Right on! I kept my sales under $20k and refused to give Paypal my Soc#. My accountant, who is also a collector, said that the IRS postponed the requirement for the 1099K for 2011. Has any one else asked their accountant this? >>



Postponed? Don't see how and I have to call BS since thousands of PayPal members were 1099ed for the 2011 year.

CollectorAtWork

Not BS. When using TurboTax to do my taxes this year, it said that reporting the 1099K was optional.

mrmint23

<< <i>Got an interesting letter today from the IRS. I had to pay a professional to do my taxes this year thanks to Obama/Ebay wanting to tax Ebay sellers. Well, PayPal never sent me the 1099 through the mail (you had to go to their site and download it). Well, the IRS sent me a letter wondering where I got my Ebay figure from (seems that PayPal never sent the IRS the 1099 info either). Apparently, PayPal couldn't afford the .45 stamps to mail their millions of users their 1099s nor could they afford to mail the IRS the info either. Not that I am one to skirt the system, but would the IRS have even found out about the Ebay sales, since PayPal never reported it to them?? Seems like a bunch of tail wagging and noone really knowing what is going on.... >>



The IRS contacted you on the day taxes were due(due date this year was 4/17)??? Normally it takes the IRS at least 6 months to respond for errors. Either your VERY VERY unlucky or your just up to the normal CRYBABY antics!

bobbyw8469

<< <i>The IRS contacted you on the day taxes were due(due date this year was 4/17)??? Normally it takes the IRS at least 6 months to respond for errors. Either your VERY VERY unlucky or your just up to the normal CRYBABY antics! >>



Once again, the resident A-hole chimes in. My tax advisor filed electronically a couple of weeks ago. Since I owed, I waited until the last minute to send the checks out, although the IRS already knew what was coming in. Would you like for me to scan you the letter they sent me for proof?? Some people just get off on being jerks.

mtcards

Honestly, the IRS probably would never catch it, but be prepared to take a large object in an exit portal if they do catch it.

If you itemize your deductions, you could probably end up writing off most, if not all of your 1099 income. Fees, purchases, grading fees, supplies, costs, including costs of shipping, mailers, even things like a computer, etc to do your sales....(I am not a professional accountant and I did not sleep at a Holiday Inn Express last night, so these are just insights to my limited tax knowledge base).

In the end, if you collect cards or try to make a little extra change, the 1099 from Paypal probably is nothing more than an inconvenience and more of a pain to keep up with deductions than it is an actual tax.

PS: I agree, the tax code needs to be simplified...its too easy for the politicians on both sides to pick winners and losers...problem is, the majority of Americans are in the middle, which take it from both sides when the rich or the poor get all the breaks.

TheTalkingWalnut

<< <i>Obama?

"Buried deep in the Housing Assistance Act of 2008, enacted with the intent of recovering the Internal Revenue Services lost revenue and supported by the Bush administration, is a new law that will require all third party sales transaction companies to report all members whose sales total over $20,000 annually and whose annual individual transactions exceed 200. The good news is that it will not go into effect until 2011 giving merchants time to prepare." >>



It appears to me as well that DUBYA was more responsible for this than Obama. And while it is convenient for follower-types to pick on the nerdy guy (Obama) because the cool rich kid (Dubya) told you to, I also recall that Obama was responsible for removing the $600 1099 threshold that had been enacted by Congress. But I don't suppose he should get any credit for that.

Stick with the facts; they (like the media lol) have a liberal bias.

Archaninator

.

dontippet

I still don't understand why people don't want to play by the rules. 1099 or no 1099, you still have to claim your profits as taxable income. It's been that way for years.

CrazyMind2017

<< <i>I still don't understand why people don't want to play by the rules. 1099 or no 1099, you still have to claim your profits as taxable income. It's been that way for years. >>



Maybe because the government is comprised of a bunch of corrupt thieves who are so hopelessly inured in the system that they're oblivious to both their own abuses of power and that of their esteemed colleagues?

FBI Soverign Citizens

dontippet

<< <i>

<< <i>I still don't understand why people don't want to play by the rules. 1099 or no 1099, you still have to claim your profits as taxable income. It's been that way for years. >>



Maybe because the government is comprised of a bunch of corrupt thieves who are so hopelessly inured in the system that they're oblivious to both their own abuses of power and that of their esteemed colleagues?

FBI Soverign Citizens >>



That may be your reason, but for most, I am sure it is a selfish reason.

jeffcbay

<< <i>Maybe because the government is comprised of a bunch of corrupt thieves who are so hopelessly inured in the system that they're oblivious to both their own abuses of power and that of their esteemed colleagues? >>



So what makes the government any different than every other American? Most Americans are corrupt thieves and are oblivious of their own abuses. For example, not wanting to pay their proper taxes.

gemint

<< <i>I still don't understand why people don't want to play by the rules. 1099 or no 1099, you still have to claim your profits as taxable income. It's been that way for years. >>



How many people claim their yard sale proceeds on their income taxes?

jeffcbay

<< <i>

<< <i>I still don't understand why people don't want to play by the rules. 1099 or no 1099, you still have to claim your profits as taxable income. It's been that way for years. >>



How many people claim their yard sale proceeds on their income taxes? >>



Then sell your cards at a yard sale.

CrazyMind2017

<< <i>So what makes the government any different than every other American? Most Americans are corrupt thieves and are oblivious of their own abuses. For example, not wanting to pay their proper taxes. >>



I think this reasoning is a bit circular.

mrmint23

<< <i>

<< <i>I still don't understand why people don't want to play by the rules. 1099 or no 1099, you still have to claim your profits as taxable income. It's been that way for years. >>



How many people claim their yard sale proceeds on their income taxes? >>



Actually garage sale receipts are "usually" exempt from from reporting. Based on the following rule:

Online Garage Sales
If your online sales are the Internet equivalent of an occasional garage or yard sale, you generally do not have to report the sales if you did not receive more than you originally paid for the item you sold. In a garage sale, you generally sell household items you purchased over the years and used personally. If you paid more for the items than you sell them for, the sales are not reportable. Losses on personal use property are not deductible, either.

hammered

It sucked that I had to pay it but my PP sales were 46K so I figured I'd be on IRS' radar.
With all the deductions and expenses, I was able to show an actual profit of only 11K so my tax liability was pretty low in the end
I will add a HUGE +1 to whoever advocated paying a CPA to find loopholes and deductions - always worth more than the fee
As far as the optional reporting, I heard something about that but I thought that it was optional for firms (ie Paypal) to report but if they choose to send the 1099s, then they have to be filed in returns.

DerekD

<< <i>

<< <i>Obama?

"Buried deep in the Housing Assistance Act of 2008, enacted with the intent of recovering the Internal Revenue Services lost revenue and supported by the Bush administration, is a new law that will require all third party sales transaction companies to report all members whose sales total over $20,000 annually and whose annual individual transactions exceed 200. The good news is that it will not go into effect until 2011 giving merchants time to prepare." >>



It appears to me as well that DUBYA was more responsible for this than Obama. And while it is convenient for follower-types to pick on the nerdy guy (Obama) because the cool rich kid (Dubya) told you to, I also recall that Obama was responsible for removing the $600 1099 threshold that had been enacted by Congress. But I don't suppose he should get any credit for that.

Stick with the facts; they (like the media lol) have a liberal bias. >>



Pelosi was the sponsor. You can blame her the most.

CollectorAtWork

I did the schedule C using TurboTax to report my business income on ebay. First, I will say that I'm not a CPA or accountant, so take what I say with a grain of salt. Besides what the others have mentioned in taking any business deductions such as grading, etc, the best advice I can give is to shift your cost basis (COGS, cost of goods sold) to ultimately reduce your income. You have to do this legally of course. What you would do is say you purchased a lot of 50 cards for $5000. You sell 25 of those cards in different ebay auctions. If you did it evenly, you could say that the cost of those cards was $2500, but I believe you have wiggle room here. You could argue that there are more star cards here in this lot, so actually, the cost of these cards was $3500. Therefore, your cost goes up, your profit goes down, and you pay less tax. However, of course, all of this has to be reasonable. You cannot say that your cost basis for a 1988 Topps common was $200. Eventually, you'll probably say this only shifts your day of reckoning to the future as when you sell all of your cards from the lot, then you have to report that, and your COGS for the remaining cards will be lower, which means a higher profit in future years. Therefore, you need to plan ahead for things like this. If you have loser cards that you purchased when the value was much too high or you just got caught up in irrational auction exuberance by buying a card 50% above VCP or hit the BIN on one of 707sportscards listing, then sell these losses to offset your gains.

lahmejoon

Plus, yard sale items are typically personal property for which what you realize from selling is well under what you spent on the item. The IRS would not permit you to deduct losses on such items, unless you were in the business of buying and selling at yard sales/flea markets.

lahmejoon

Sorry - didn't see mrmint's reply on yard sales before I posted. I concur.

WinPitcher

<< <i>For example, not wanting to pay their proper taxes. >>




Jeff, what exactly is 'proper taxes'? With the current tax code mess, I try to pay the least amount possible.
And between the Fed and State that's almost 18% of our income.

brendanb438

<< <i>Not BS. When using TurboTax to do my taxes this year, it said that reporting the 1099K was optional. >>



So would the IRS agree then that it is optional, because I am pretty sure that when PayPal sent me a 1099K they also sent the IRS the same information.

You are trying to say that if I just decided to leave the 1099K off my taxes the IRS would just ignore the 1099K paperwork they received and look the other way?

jeffcbay

<< <i>I will add a HUGE +1 to whoever advocated paying a CPA to find loopholes and deductions - always worth more than the fee >>



Which is precisely why I don't feel bad about the "rich getting taxed too much". In the end, they pay less than I do.

miconelegacy

<< <i>

<< <i>I will add a HUGE +1 to whoever advocated paying a CPA to find loopholes and deductions - always worth more than the fee >>



Which is precisely why I don't feel bad about the "rich getting taxed too much". In the end, they pay less than I do. >>



You may be able to find a CPA willing to play games and find loopholes, but they won't back you up in court with the IRS.

If you structure your life in and around 1099 income, you in the end can pay very little tax legally.

TonyC

For the record, Paypal FUBARed the 1099-K requirement ROYALLY. I know FIRST-HAND.




I have two separate Paypal accounts, both with my SSN. One had around $23,000 and well over 200 transactions--which combined meet the threshold--and the other had around $7,000 and well over 200 transactions. According to Paypal's IRS FAQ, Paypal is supposed to link all accounts with the same SSN or Tax ID number and mail out 1099-K's for each account.


By the second week of February, Paypal had generated 1099-K forms for NEITHER account.


The abridged version of this story is that I called Paypal at least 3 times per week, every week, from the second week of February through the first week of April, trying to obtain my 1099-K forms. My taxes were done in February, but I could not submit them because I did not have these forms. Some Paypal CS reps told me that if I didn't get one by January 31st, I didn't meet the requirements; other reps didn't understand why I didn't get one, but said that they could not help me because the "Compliance Department" is in charge of tax forms, but they do not take incoming calls. I talked to well over 5 different supervisors, all of which assured me that they would get back to me and never did. In March, I finally got over the supervisor hurdle and reached a customer service manager, who agreed that I was owed 2 1099-K forms, but he couldn't generate them because Compliance has the authority to do that, but they don't take incoming phone calls--not even from him!


I received my 1099-K forms in the nick of time--one on April 5th and one on April 7th.



What I got out of my nightmare:

A) I am surely not the only person who was supposed to get a 1099-K form but did not
Paypal did not have a contingency plan for the customer service reps to handle a customer who was supposed to get a 1099-K form but did not get one
C) Paypal looked at the 1099-K requirement as a headache and really did not care less about issuing them

JMDVM

Postponed? Don't see how and I have to call BS since thousands of PayPal members were 1099ed for the 2011 year. >>



It's nice to know I'll have someone to consult when my accountant retires.....Again, my accountant told me that the IRS was going to postpone/delay/not enforce the filing of a 1099-k for the $20,000-200 transaction threshold for tax year 2011 and possibly 2012. It was a late decision, probably made after Paypal already complied with the IRS. Once Paypal sent the 1099-k to the IRS, you have no choice, the IRS has your numbers. Is there anyone out there who did not cooperate with Paypal?

To another point, what is the difference between someone selling personal items in a yard sale or in an on-line sale? The $20000/200 transaction was the threshold agreed upon to draw a line in the sand---above the number you are a business, below the number its personal.

In regards to taxes, if the government treated our tax dollars with respect and not poured it down the sewer with the likes of GSA, Solyndra, foreign wars,etc then maybe people would be more willing to pay taxes knowing their had earned dollars were not being wasted.

mtcards

The rich pay more in taxes in one year than I will in a lifetime, I dont begrudge them or am I jealous of them. The poor get more handouts in one year, than I will in a lifetime, I dont begrudge them nor am I jealous of them.

Unfortunately, when it comes to the above philosophy, I am an the minority

jeffcbay

<< <i>The rich pay more in taxes in one year than I will in a lifetime >>



Are we talking ACTUAL paying, or what they "get credit" for paying?

CollectorAtWork

<< <i>

<< <i>Not BS. When using TurboTax to do my taxes this year, it said that reporting the 1099K was optional. >>



So would the IRS agree then that it is optional, because I am pretty sure that when PayPal sent me a 1099K they also sent the IRS the same information.

You are trying to say that if I just decided to leave the 1099K off my taxes the IRS would just ignore the 1099K paperwork they received and look the other way? >>



Yea, it's semantics because you still need to report that income but just not in the form of a 1099K. Here's the relevant screen from TurboTax.

mtcards

<< <i>

Are we talking ACTUAL paying, or what they "get credit" for paying?[/q

Actual paying......contrary to what certain world leaders who used to be community organizers say, the top 1% of wage earners in America pay 38% of all taxes collected at a federal level and the bottom 49.5% pay no tax at all. (Arent my numbers, theyre the IRS's). Meanwhile, the bottom 49.5% receive 99% of all govt entitlements (I do not consider social security an entitlement, per se, even though the govt does). Again, my issue is not with either group, its with the govt, who wastes tax money on ridiculous ideas. Eliminating waste will solve the debt problem.

WinPitcher

JMDVM

One difference between online sales and garage type sales is that
in many cases yard sales generally do not generate profit. In most cases
the item sold is for less than it was originally bought for. If one sells an item
at a yard sale that does generate income they could claim the income.


At least that's what I have been told.


Steve

fergie23

Gotta love the self righteous tax cheat. If you make money after expenses/costs you report it. Pure and simple. Doesn't matter if it is a hobby, a part time job or whatever. If people would simply pay the taxes they owe according to the current tax code our federal debt and deficit would be in somewhat better shape.

If you don't like your tax rates or the tax code vote for a Republican. If you want to help the poor and preserve the environment via inefficient government programs vote for a Democrat and realize you are going to pay more in taxes. Either way we are all eventually screwed because our elected officials on both sides love to spend (either through spending programs or unfunded tax cuts). Just like executives that eventually destroy a company seeking greater short term returns and a higher stock price all of our elected officials are going to be gone by the time the bill comes due. Anyone that thinks who we elect actually will impact government debt and the yearly deficits need only look a the history of the federal debt. Both Democratic and Republican Congresses increase the debt as well as Republican or Democratic presidents. In the end they are all the same when it comes to fiscal discipline the biggest difference is that Democrats typically try to simply spend more with wildly unrealistic projected tax offsets whereas Republicans increase tax breaks with wildly unrealistic projections of future growth without cutting the size of the government. Two sides of the same coin but pandering to different audiences.

Sadly any politician that actually embraced a realistic solution for tackling the deficit and federal debt by changing medicare, social security and the tax code while simultaneously cutting funding to all government entities including defense would never get elected or survive a re-election. We are on a spiral path where we eventually will pay more in taxes for a whole lot less.

Robb

ShootyBabitt

gemint

This thread's turning too political. It's clearly an issue that people have strong feelings about one way or the other. I will say that I paid AMT and a very significant amount of taxes this year. I don't complain as I have a decent job and am fortunate to have one in this economy. Having said that, the main issue I have with the tax system for this hobby is that many of my cards were purchased years ago and for not insignificant amounts of money. Many cards don't have documentation to prove what I paid for them. For example, I paid $200 cash at a mall card show for a 1969 Mantle many years ago. There was no receipt given from the small time dealer I bought the card from. I eventually had it graded when PSA came on the scene and it got a PSA 8. If I were to sell the card for $500, I'd happily pay the taxes on the ~ $290 I made. The problem is since I don't have documentation showing what I paid for the card, in an audit the IRS will consider that I got the card for free and require me to pay taxes on $500 in profit.

Just a question for all the self righteous on the board...do any of you who aren't forced to receive a 1099 voluntarily claim the small hobby profits on your 1040??? How many turn yourselves in if you go over the speed limit and a cop doesn't see you? I just get tired of people saying someone isn't paying their fair share. Many of the people saying this are cheating on their own taxes. For the record, I did not turn a profit in 2011. I bought a high grade 1971 set for $53k and am still $20k under what I paid for it.

WinPitcher

I'm still trying to figure out what a fair share is.

fergie23

I declare all income, heck back in the golden days of playing poker on the internet I declared the $4300 I won one year. Fortunately, or unfortunately, as folks that have watched my unopened rips unfold I lose money on the hobby. I agree that cost basis can be a slippery slope and I would tell my accountant what I paid with or without documentation and go from there. If I got audited then so be it.

Equating taxes and speeding is an apples to oranges comparison. They are not even remotely similar activities.

I have no idea what a fair share is I simply pay what my accountant says I have to.

Anyways there is a simple solution for people that don't want to have to report income from the hobby, rip vintage wax!

Robb

mtcards

<< <i>I'm still trying to figure out what a fair share is. >>




According to some, fair share is more than 38% and fair share to others is ZERO

hammered

<< <i>I'm still trying to figure out what a fair share is. >>





Herman Cain says it's 9%

CDsNuts

thanks to Obama/Ebay wanting to tax Ebay sellers.

This is the greatest statement on the history of these boards.

1) Ebay does not want their own sellers taxed. That would be less money for people to spend on ebay.
2) The government has always wanted to tax ebay sellers (all sellers who profit off anything for that matter), they only recently figured out a way in which to do it.

bobbyw8469

<< <i>This is the greatest statement on the history of these boards. >>



Oh goody! I am sooooo glad that my mere typed words have allowed me to acheive immortality status.

Alfonz24

<< <i>I'm still trying to figure out what a fair share is. >>



Total Income = Fair Share