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What is the "trigger" level for ebay to 1099 sellers?
georgiacop50
Posts: 2,909 ✭✭✭✭
I know this has been discussed b4, but with the wonky search engine it is just so hard to find stuff like this
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I think its $20,000 and 200 transactions
As a "payment processor," paypal is, according to the IRS, required to take this action. Also, keep in mind that any electronic movement of your money (i.e banks, credit cards) is subject to scrutiny by the taxman.
Per your your paypal agreement, you can choose to receive paper copies of the 1099K:
"You may withdraw your consent to receive Communications electronically by writing to us at "Attn: Electronic Communications Delivery Policy, P.O. Box 45950, Omaha, NE 68145-0950, or by contacting us via the “Contact” or "Contact Us" link at the bottom of each page of the PayPal website. If you fail to provide or if you withdraw your consent to receive Communications electronically, PayPal reserves the right to either deny your application for an Account, restrict or deactivate your Account, close your Account and any sub-account (such as a Student Account), or charge you additional fees for paper copies.
After you consent to receive Communications electronically, you may withdraw your consent to receive IRS Form 1099-K electronically by contacting us as described above. You will continue to receive all your other Communications electronically, but we will send your Form 1099-Ks to you by U.S. mail."
Governments can print currency. Only the people can print faith in it — and they’re running low on ink.
The answer: My unrelated business, an S-Corp., accepted PayPal and was over their 20k/200 limit. Since both PayPal accounts are assigned to the same SSN I got two 1099's.
Lance.
Governments can print currency. Only the people can print faith in it — and they’re running low on ink.
Keep in mind that a 1099 does not indicate IF you are required to report the income to the IRS. All of your income is reportable. The 1099 is the IRS's way of making payment processors report your income in an effort to help identify individuals who don't report income. The $20K and 200 transaction triggers are just arbitrary and only mark the point at which your payment processor (Paypal) is ALSO required to report your income. Look for the IRS to attempt to lower these thresholds in the future.
This.
The 1099 of all types is a way to help the IRS with audits and reporting of income between individuals. Just because you don't receive a 1099 from paypal, the sweepstakes you entered at the mall where you won that $1000 or any other income the IRS considers taxable doesn't relieve us of the requirement to report it ourselves.
The lack of reporting of income from sales online, yardsales, shows, and the lack of payment to the States for sales tax owed on internet purchases out of state are IMO fueling the gov's war on cash.
My Ebay Store
for those individuals on here that like to ppgift and such, they know (its still a transaction and movement of money from one acct to another) so you'd best be reporting it.
I don't like paying taxes anymore than anyone else, but best remedy is to properly report and file.