I was 1099'd by PayPal for trivial ebay sales. Turned out my business, with reportable income above the level, was associated with my personal account by my SSN, so I had to deal with it.
Lance.
Some people are apparently forgetting that gross receipts (eBay, yard sale, etc.) are not what is taxable. When you sell something, only the profit is. Almost everything I have ever seen sold at a yard sale was clearly sold at a loss vs original cost or value.
The real hassle of these small 1099s is not paying the tax you owe (often none), it is figuring out a cost basis.
Can Pay Pal issue a 1099 based on name and address only? My personal pay pal account is not linked to any bank account and they don't have my SSN. Is it still possible for them to issue a 1099?
Successful BST transactions with lordmarcovan, Moldnut, erwindoc
@jafo50 said:
Can Pay Pal issue a 1099 based on name and address only? My personal pay pal account is not linked to any bank account and they don't have my SSN. Is it still possible for them to issue a 1099?
If someone sells $25K worth of PMs/coins on the BST and accepts all the $$ as PP gift, should they get a 1099 from PP? What about if they accept reg PP for the goods?
@BigA said:
Another thing that is weird about this is I'm sure there have been a gazillion sellers with sales over $600 that read this....is this the ONLY person that got a 1099 (those with sales under $20k). I didn't see any "I got one also" reports
See above. It depends on the State in which you live.
Actually the $600 is a federal amount.
All compensation of $600 or more requires a 1099 to be issued.
In all cases the costs can be deducted.
In this instance, since it is an estate, the cost basis is equal to the selling price, if within 6 months of the date of death.
Less the cost of shipping.
@jafo50 said:
Can Pay Pal issue a 1099 based on name and address only? My personal pay pal account is not linked to any bank account and they don't have my SSN. Is it still possible for them to issue a 1099?
If someone sells $25K worth of PMs/coins on the BST and accepts all the $$ as PP gift, should they get a 1099 from PP? What about if they accept reg PP for the goods?
PayPal gifts are not included, goods would be. Not sure what happens if they don't have your SS#
it's crackers to slip a rozzer the dropsy in snide
@ms70 said:
Maybe eBay moving away from PayPal isn't a bad thing after all.
The $20,000 / 200 transactions thing is not only PayPal, it is a Federal requirement for all payment processors. If you have $20,000 / 200 in Amazon payments you will get one from them, same if you sell on Etsy, same if you use square to receive payments, same if you have a merchant account with AMEX or VISA etc.
You can run but you can't hide from the tax man. Even if you don't get a 1099 all those transactions are stored somewhere in "the cloud" and eventually they will find a way to sniff them out.
it's crackers to slip a rozzer the dropsy in snide
@jafo50 said:
Can Pay Pal issue a 1099 based on name and address only? My personal pay pal account is not linked to any bank account and they don't have my SSN. Is it still possible for them to issue a 1099?
If someone sells $25K worth of PMs/coins on the BST and accepts all the $$ as PP gift, should they get a 1099 from PP? What about if they accept reg PP for the goods?
PayPal gifts are not included, goods would be. Not sure what happens if they don't have your SS#
You can't get a PP account without a SSN, correct?
My recollection of a 1099 is that it is used to report money from a payer direct to a payee and not involve a middle man/money forwarder like PP. Is the current requirement for PP to report limited to eBay activity only or to all sales using PP?
Say I lease my farm ground to another farmer for $25K. He pays me with PP + fees. Does the 1099 come from the renter or from PP?
@derryb said:
Yard sale income is not exempt from tax reporting even though no one reports it. Look for the IRS to continue being creative in learning about income.
They've already learned about; they just haven't figured out a cost effective means to go after it. Maybe they'll require that all yard sales be conducted in the presence of an IRS auditor.
@jafo50 said:
Can Pay Pal issue a 1099 based on name and address only? My personal pay pal account is not linked to any bank account and they don't have my SSN. Is it still possible for them to issue a 1099?
If someone sells $25K worth of PMs/coins on the BST and accepts all the $$ as PP gift, should they get a 1099 from PP? What about if they accept reg PP for the goods?
PayPal gifts are not included, goods would be. Not sure what happens if they don't have your SS#
You can't get a PP account without a SSN, correct?
My recollection of a 1099 is that it is used to report money from a payer direct to a payee and not involve a middle man/money forwarder like PP. Is the current requirement for PP to report limited to eBay activity only or to all sales using PP?
Say I lease my farm ground to another farmer for $25K. He pays me with PP + fees. Does the 1099 come from the renter or from PP?
PayPal would be the payment processor but unless you had the $25K plus another 199 transactions you would not get one. The way I read it it must be $20K and 200 transactions. Unless of course you live in MA or VT and who knows where else.
Here's a quote from the PayPal site.....
Under the IRC Section 6050W, PayPal is required to report to the IRS the total payment volume received by US account holders whose payments exceed both of these levels in a calendar year:
US$20,000 in gross payment volume from sales of goods or services in a single year
200 separate payments for goods or services in the same year
IRC Section 6050W applies to all payment processors, including PayPal. Our goal is to help PayPal sellers understand and comply with the requirements.
Here's a link to the site that should answer a lot of questions for everyone......
@jafo50 said:
Can Pay Pal issue a 1099 based on name and address only? My personal pay pal account is not linked to any bank account and they don't have my SSN. Is it still possible for them to issue a 1099?
Excellent point. They can issue it but there will be no connection to you by the IRS without the SS #. I checked my account and there is an option to add a SS # but there is none presently on it
@davewesen said:
So as a seller, am I supposed to send 1099s to eBay for their fees, to PAYPAL for their fees, to USPS for their fees?
not yet. EB and PP are required to claim the income just as you are required to report the income from your ebay sales. IRS no longer trusts everyone to report their ebay income, thus the double reporting by you and PP to the IRS.
No Way Out: Stimulus and Money Printing Are the Only Path Left
@BigA said:
Another thing that is weird about this is I'm sure there have been a gazillion sellers with sales over $600 that read this....is this the ONLY person that got a 1099 (those with sales under $20k). I didn't see any "I got one also" reports
See above. It depends on the State in which you live.
Actually the $600 is a federal amount.
All compensation of $600 or more requires a 1099 to be issued.
In all cases the costs can be deducted.
In this instance, since it is an estate, the cost basis is equal to the selling price, if within 6 months of the date of death.
Less the cost of shipping.
Actually, the $20k is the Federal requirement for transfer payments (see below). It's a 1099-K form.
I was told that bartering transactions are taxable as well. Example: A neighbor paints your house for a value of $8000.00. You in turn do the electrical wiring in his house for a value of $10,000. The $2000.00 difference/value "profit" is taxable. Correct?
Successful transactions:Tookybandit. "Everyone is equal, some are more equal than others".
I would certainly include it on the tax return, if you don't the IRS computer will send you a bill. It is a small amount but if you want to reduce tax get as many actual expenses as you can, ebay fees, paypal fees, paypal shipping ect. Then see if you can figure out basis on as many items as possible, use the percentage cost on those items to estimate the cost on the rest of the items, what is left is your taxable profit. Then when you file the return include form 8275 and disclose what you did in as few words as possible. in the last sentence of your explanation on the 8275 state that you used "the best available information" and that you used a reasonable estimation method that complies with the "Cohan Rule". Should not be a problem, but you should run this by your CPA. Also probably not a very good idea to get tax advice on a rare coin forum.
@BLUEJAYWAY said:
I was told that bartering transactions are taxable as well. Example: A neighbor paints your house for a value of $8000.00. You in turn do the electrical wiring in his house for a value of $10,000. The $2000.00 difference/value "profit" is taxable. Correct?
No the whole 10,000 would be taxable less your direct cost to do the wiring job. Some examples of direct costs are materials and labor for employees but not your labor.
@jafo50 said:
Can Pay Pal issue a 1099 based on name and address only? My personal pay pal account is not linked to any bank account and they don't have my SSN. Is it still possible for them to issue a 1099?
Excellent point. They can issue it but there will be no connection to you by the IRS without the SS #. I checked my account and there is an option to add a SS # but there is none presently on it
SSN : Add your SSN
My SSN on PP is empty as well.
Successful BST transactions with lordmarcovan, Moldnut, erwindoc
I am an individual seller. Do I have to provide my SSN?
If you have a SSN or eligible to have a SSN then you are required to provide that to PayPal for Form 1099-K reporting. If you are not eligible to have a SSN, you should obtain an ITIN from the IRS and provide it to PayPal. Please visit the IRS website (https://www.irs.gov/uac/about-form-w7 ) for information on the ITIN application process.
What happens if I don’t provide my tax ID number?
If you do not provide your tax ID number (Social Security Number (SSN), Employer Identification Number (EIN), or Individual Tax Identification Number (ITIN)) after we've requested it, we may place limitations on your account.
Everything you want to know about PayPal 1099s.....
I am an individual seller. Do I have to provide my SSN?
Only if you exceed the $20k/200 transactions threshold
How will I know if these rules affects me?
PayPal will track the payment volume of your account(s) to check whether your payment volume exceeds both of these levels in a calendar year:
$20,000 USD in gross payment volume from sales of goods or services in a single year
200 payments for goods or services in the same year
You may be asked to provide your tax ID number, such as a Social Security Number (SSN) or Employer Identification Number (EIN), to your existing account(s), if you don’t already have one on file.
If you cross the IRS thresholds in a given calendar year, PayPal will send Form 1099-K to you and the IRS for that year early in the following year.
What does PayPal need from me when my PayPal transaction volume approaches the thresholds?
PayPal will ask affected sellers to update their account(s) by providing a tax ID number, if they don't already have one on file. Your tax ID number is one of these:
Your Social Security Number (SSN)
Your Employer Identification Number (EIN)
Your Individual Tax Identification Number (ITIN)
Being executor can be a fairly complex affair.... so many things can be taken care of in advance and make everything more simple. Of course, we do not always know when the final event will occur, but speaking from recent experiences, it is sometimes, especially in the case of advanced age, a case of planning. Conversationally, it sounds a bit morbid... but in reality, it is no different than planning any other life event. I was able to do this for the last family demise and it made things much simpler. Best of luck... Cheers, RickO
Comments
I was 1099'd by PayPal for trivial ebay sales. Turned out my business, with reportable income above the level, was associated with my personal account by my SSN, so I had to deal with it.
Lance.
Maybe eBay moving away from PayPal isn't a bad thing after all.
Great transactions with oih82w8, JasonGaming, Moose1913.
Yard sale income is not exempt from tax reporting even though no one reports it. Look for the IRS to continue being creative in learning about income.
The long arm of the tax man
No Way Out: Stimulus and Money Printing Are the Only Path Left
Some people are apparently forgetting that gross receipts (eBay, yard sale, etc.) are not what is taxable. When you sell something, only the profit is. Almost everything I have ever seen sold at a yard sale was clearly sold at a loss vs original cost or value.
The real hassle of these small 1099s is not paying the tax you owe (often none), it is figuring out a cost basis.
Can Pay Pal issue a 1099 based on name and address only? My personal pay pal account is not linked to any bank account and they don't have my SSN. Is it still possible for them to issue a 1099?
Successful BST transactions with lordmarcovan, Moldnut, erwindoc
If someone sells $25K worth of PMs/coins on the BST and accepts all the $$ as PP gift, should they get a 1099 from PP? What about if they accept reg PP for the goods?
All good questions....
The long arm of the digital world finding yet another place to reach into.
Time to go back to money orders. Ironically, they have less of a "paper trail" than PP.
Actually the $600 is a federal amount.
All compensation of $600 or more requires a 1099 to be issued.
In all cases the costs can be deducted.
In this instance, since it is an estate, the cost basis is equal to the selling price, if within 6 months of the date of death.
Less the cost of shipping.
BHNC #203
PayPal gifts are not included, goods would be. Not sure what happens if they don't have your SS#
it's crackers to slip a rozzer the dropsy in snide
The $20,000 / 200 transactions thing is not only PayPal, it is a Federal requirement for all payment processors. If you have $20,000 / 200 in Amazon payments you will get one from them, same if you sell on Etsy, same if you use square to receive payments, same if you have a merchant account with AMEX or VISA etc.
You can run but you can't hide from the tax man.
Even if you don't get a 1099 all those transactions are stored somewhere in "the cloud" and eventually they will find a way to sniff them out.
it's crackers to slip a rozzer the dropsy in snide
You can't get a PP account without a SSN, correct?
My recollection of a 1099 is that it is used to report money from a payer direct to a payee and not involve a middle man/money forwarder like PP. Is the current requirement for PP to report limited to eBay activity only or to all sales using PP?
Say I lease my farm ground to another farmer for $25K. He pays me with PP + fees. Does the 1099 come from the renter or from PP?
They've already learned about; they just haven't figured out a cost effective means to go after it. Maybe they'll require that all yard sales be conducted in the presence of an IRS auditor.
PayPal would be the payment processor but unless you had the $25K plus another 199 transactions you would not get one. The way I read it it must be $20K and 200 transactions. Unless of course you live in MA or VT and who knows where else.
Here's a quote from the PayPal site.....
Under the IRC Section 6050W, PayPal is required to report to the IRS the total payment volume received by US account holders whose payments exceed both of these levels in a calendar year:
US$20,000 in gross payment volume from sales of goods or services in a single year
200 separate payments for goods or services in the same year
IRC Section 6050W applies to all payment processors, including PayPal. Our goal is to help PayPal sellers understand and comply with the requirements.
Here's a link to the site that should answer a lot of questions for everyone......
https://www.paypal.com/us/webapps/mpp/irs6050w
it's crackers to slip a rozzer the dropsy in snide
So as a seller, am I supposed to send 1099s to eBay for their fees, to PAYPAL for their fees, to USPS for their fees?
Only if you are a "payment processor" and acting as a conduit for those payments. That's my thought.
it's crackers to slip a rozzer the dropsy in snide
Excellent point. They can issue it but there will be no connection to you by the IRS without the SS #. I checked my account and there is an option to add a SS # but there is none presently on it
not yet. EB and PP are required to claim the income just as you are required to report the income from your ebay sales. IRS no longer trusts everyone to report their ebay income, thus the double reporting by you and PP to the IRS.
No Way Out: Stimulus and Money Printing Are the Only Path Left
Actually, the $20k is the Federal requirement for transfer payments (see below). It's a 1099-K form.
https://efile.com/what-is-form-1099-misc-income-tax-return-requirements/
I was told that bartering transactions are taxable as well. Example: A neighbor paints your house for a value of $8000.00. You in turn do the electrical wiring in his house for a value of $10,000. The $2000.00 difference/value "profit" is taxable. Correct?
I would certainly include it on the tax return, if you don't the IRS computer will send you a bill. It is a small amount but if you want to reduce tax get as many actual expenses as you can, ebay fees, paypal fees, paypal shipping ect. Then see if you can figure out basis on as many items as possible, use the percentage cost on those items to estimate the cost on the rest of the items, what is left is your taxable profit. Then when you file the return include form 8275 and disclose what you did in as few words as possible. in the last sentence of your explanation on the 8275 state that you used "the best available information" and that you used a reasonable estimation method that complies with the "Cohan Rule". Should not be a problem, but you should run this by your CPA. Also probably not a very good idea to get tax advice on a rare coin forum.
Oh yes, barter is taxable, if anyone divulges...
No the whole 10,000 would be taxable less your direct cost to do the wiring job. Some examples of direct costs are materials and labor for employees but not your labor.
Quick check on GOOGLE
https://www.paypal.com/us/selfhelp/article/How-does-PayPal-report-my-sales-to-the-IRS-Will-I-receive-a-1099-tax-statement-FAQ729
My SSN on PP is empty as well.
Successful BST transactions with lordmarcovan, Moldnut, erwindoc
Info about SS#s on PayPal.....
I am an individual seller. Do I have to provide my SSN?
If you have a SSN or eligible to have a SSN then you are required to provide that to PayPal for Form 1099-K reporting. If you are not eligible to have a SSN, you should obtain an ITIN from the IRS and provide it to PayPal. Please visit the IRS website (https://www.irs.gov/uac/about-form-w7 ) for information on the ITIN application process.
What happens if I don’t provide my tax ID number?
If you do not provide your tax ID number (Social Security Number (SSN), Employer Identification Number (EIN), or Individual Tax Identification Number (ITIN)) after we've requested it, we may place limitations on your account.
Everything you want to know about PayPal 1099s.....
https://www.paypal.com/us/webapps/mpp/irs6050w
it's crackers to slip a rozzer the dropsy in snide
Only if you exceed the $20k/200 transactions threshold
@tommy44
Very informative....
Thanks
Joe
Successful BST transactions with lordmarcovan, Moldnut, erwindoc
Being executor can be a fairly complex affair.... so many things can be taken care of in advance and make everything more simple. Of course, we do not always know when the final event will occur, but speaking from recent experiences, it is sometimes, especially in the case of advanced age, a case of planning. Conversationally, it sounds a bit morbid... but in reality, it is no different than planning any other life event. I was able to do this for the last family demise and it made things much simpler. Best of luck... Cheers, RickO