just got me a paypal 1099k

[InvstmntComcSuply]

we got a 1099 for the paypal account and we were way under $20K, in fact, under $10K and I doubt 200 transactions either.

 

i think the info only gets reported to the IRS if you are over $20K, etc.

 

Something don't sound right here??

 

Yeah, I always assumed all 1099s went to the IRS and would assume the same for yours

[The Less Blob]

i was mistaken, we didn't get a 1099, my wife sent me our paypal financial summary page, which states your gross for the last year

[Bills Comics]

When Paypal first started they didnt require your SSN. A few years ago I signed on to PP and they made me enter my SSN. Now you have to enter your SSN when you open an account .

[The-Collector]

Is there a way to check the number of transactions you are up to? And their worth?

[Spider-Dan]

I have had over 200 transaction. but here is the thing. they are adding every transaction. if I wanted to send money to my bank account. they count that.

 

if I go to the post office and use paypal to ship something they counts it as a transaction. the point is everything you do not matter what it count.

 

I can deal with this.... but for some of you that are not aware. mark it down now. its base on everything you do with paypal. that kinda sucks. that is not posted anywere. shock to find that part out.

 

I believe its ONLY payments coming IN - Not transactions

 

In 2011 I had 198 (I was sweating it) and over 100 going out, and I didnt recieve anything. I had well over the $20K too

[Boboset]

Like some of you, I received a 1099K this year for the first time.

 

Does anyone have any good resources for better understanding how this impacts my taxes owed? They can't expect you to pay taxes on the gross amount, can they? It's not all profit...

 

This has me pretty worried as I'm working a full time unpaid internship and have additional school classes. I have zero time for a paying job and my inventory of items is nearly on empty.

[Glynn Sr]

@ Boboset

 

I know from what I have seen on the 1099K that I got that in fact it is wrong. even more it show that paypal has over rated my amount of funds I received. I google on this 1099k and found that many like have errors on what total amounts were received threw paypal. i have gone over my take for last year and it much less then what is on the 1099k. I called paypal they will get back to me.

 

as I said a few time here in this thread. they count every transaction even when I paid to ship a item or if I even added funds to my paypal account. everything I did counted as a transaction that dont make sense,

 

I just got a call.. Now the one they sent me is no good

 

I say that it best that many who have had a great deal of dealing with paypal that you may want to go over your take for last year, you may get one of these incorrect 1099k and be stuck. just passing this onto you.

[MadGenius]

I fell about $800 short of the $20K max so I thankfully avoided this. I kept track at the end of the year and pulled my big ticket items off eBay when I was getting too close.

[BeachBum]

I fell about $800 short of the $20K max so I thankfully avoided this. I kept track at the end of the year and pulled my big ticket items off eBay when I was getting too close.

 

Well if you don't report it still you'd have a problem if you got audited I bet.

[The-Collector]

Is there a way to check the number of transactions you are up to? And their worth?

 

Anyone?

[ft88]

You can go to paypal and export/download your transaction history.

 

You can also apply filters like "payments received" but double check you didn't miss something.

 

Then just count the number of transactions on excel or with fingers.

 

Again, it is an "AND" funtion so 200 transactions AND $20,000.

 

Boboset - the IRS believes you owe taxes on the whole amount as a starting point. If is up to you to claim the expenses and deduct them. You can claim the costs of those sales against the gross. If audited you would need to provide some evidence.

 

Sold and received in payments $25,000 on 500 transactions - you get a 1099 and need to report.

You originally paid $15,000 (receipts, checks, ebay, bank/credit card statements etc - no perfect answer here on proof)

Postage, boxes etc were $1000 (same evidence)

 

You'd need to include all of the above in your taxes and pay taxes on $9000 as additional income - consult an accountant as they say.

 

mileage,supplies, advertising, website costs can also be claimed as deductions

home office and related home expenses can also be claimed but I've heard this can be a red flag for an audit - it is still OK to do but only if you keep good records and understand all the detailed rules.

 

Do not ignore this or in 1-3 years you will receive an IRS nasty gram saying you owe taxes on the whole amount and then you have to prove deductions anyway (or pay the piper on it all plus fees and interest which are a lot)

 

Welcome to the Republican party.

[Sqeggs]

You can go to paypal and export/download your transaction history.

 

You can also apply filters like "payments received" but double check you didn't miss something.

 

Then just count the number of transactions on excel or with fingers.

 

Again, it is an "AND" funtion so 200 transactions AND $20,000.

 

Boboset - the IRS believes you owe taxes on the whole amount as a starting point. If is up to you to claim the expenses and deduct them. You can claim the costs of those sales against the gross. If audited you would need to provide some evidence.

 

Sold and received in payments $25,000 on 500 transactions - you get a 1099 and need to report.

You originally paid $15,000 (receipts, checks, ebay, bank/credit card statements etc - no perfect answer here on proof)

Postage, boxes etc were $1000 (same evidence)

 

You'd need to include all of the above in your taxes and pay taxes on $9000 as additional income - consult an accountant as they say.

 

mileage,supplies, advertising, website costs can also be claimed as deductions

home office and related home expenses can also be claimed but I've heard this can be a red flag for an audit - it is still OK to do but only if you keep good records and understand all the detailed rules.

 

Do not ignore this or in 1-3 years you will receive an IRS nasty gram saying you owe taxes on the whole amount and then you have to prove deductions anyway (or pay the piper on it all plus fees and interest which are a lot)

 

Welcome to the Republican party.

 

I thought expanded use of 1099s was part of the legislation setting up Obamacare.

[jimjum12]

Its a certain threshold of transactions AND amount of money going through the account. Like 200 transactions and total of $20k in goods and services processed...

 

This is not entirely true. If you have a paypal account that accepts Merchant Cards you will receive the 1099 for a far lower amount. I'm not totally sure what a Merchant Card even is....but my account accepts them so I get a 1099 for ALL my sales, no matter the amount. It really caught me by surprise last year. If you re-spend that money on more books, you can probably get an accountant to help set it up where that can be deducted from the total, but your entire collection has to become "inventory".....or at least everything from that point on. GOD BLESS...

 

-jimbo(a friend of jesus) (thumbs u

[Boboset]

Thank you ft88!

 

I'm a complete novice on anything tax related. You've been a big help!

[Buzzetta]

Someone once told me that we are supposed to report out-of-state purchases that were made online as those purchases are subject to taxation by state.

[Shaven Kev-migration]

Our state just has a formula for paying "use tax" on online purchases that don't collect sales tax. Its much easier than trying to track every online purchase. It ends up being like 35-40 bucks a year, but is probably income based. Old people who don't shop online don't pay it.

[The-Collector]

Thank you ft88!

 

I'm a complete novice on anything tax related. You've been a big help!

 

+1000

[Sqeggs]

Basically, the IRS is interested in your net, which is going to be much below what PayPal is reporting on the 1099s. There's also the question of whether you are selling the occasional book but are using the funds to buy other books. In that case, my understanding is that the IRS considers the activity a hobby and the profit you make now and then is not taxable income. But if you are consistently making a profit selling books, as with some people on the boards who say that they are slowly selling off their collections over a period of years, I think you would be considered by the IRS to be running a business rather than engaging in a hobby. If there's a significant amount of money involved, consider getting an accountant to prepare your return. Even H&R Block should work here. If I understand their guarantee, if you disclose everything to their preparer, then they -- not you -- would be responsible for any misinterpretation of the law and would represent you in an audit. Disclaimer: I haven't used them in many years.

 

ft88 is certainly correct that now that 1099s are involved, the IRS's matching programs are going to catch up with you sooner rather than later if you just blow the whole thing off. That said, though, I find it hard to imagine that the IRS is going to find it worth its while to audit people who are claiming reasonable expenses against their 1099 earnings.

[Buzzetta]

It makes me reflect on the fact that one of the best pizza places around, Grimaldi's by the Brooklyn Bridge (Brooklyn Side) is cash only. I can only imagine what really goes on with stuff like that.

[rjpb]

Someone once told me that we are supposed to report out-of-state purchases that were made online as those purchases are subject to taxation by state.

 

Different states have different mechanisms for trying to collect this. I don't know if it's changed, but a few years ago when I had to file in NY, they had a "suggested" amount based on income for you to pay for uncollected sales tax on out of state purchases. The interesting thing is if you read the paperwork, you could claim that you had less or even zero out of state purchases, and pay a smaller amount or nothing.

 

As for the Paypal 1099s - look at his as an opportunity to deduct everything under the sun related to the buying and selling of comics. You might find that instead of owing the IRS, you actually lost money on your "business", and may be able to deduct the losses against your other income. It's generally more believable that you had a money losing business if there is actually some income from it. Talk to your accountant.