Irs to tax your ebay 2011 (1 Viewer)

[IXEC]

BAD NEWS.....\\

Starting on Jan 1st 2011....PayPal will be required to report all Transactions that exceed $20.000 or 200 payment made through PayPal to the IRS....

Taxes. The following acknowledgement has been added to Section 4.7 (Taxes): You acknowledge that in starting in 2011, PayPal will report to the Internal Revenue Service the total amount of the payments you receive each calendar year into all the Accounts you own if you(i) receive more than $20,000, and (ii) receive more than 200 payments, in that calendar year.



THE PARTY IS OVER...

 

[jazzeum]

Can anyone spell "Money Order"?

 

[IXEC]

Can anyone spell "Money Order"?

I believe that's against eBay policy...

Accepted Payments Policy


Our Accepted Payments policy helps ensure that buyers and sellers on eBay are offered safe, convenient payment options.

For most categories, sellers need to offer one or more of the following electronic payment choices:

PayPal

ProPay

Moneybookers

Paymate

Credit card or debit card processed through the seller's Internet merchant account

Additionally, payment upon pickup and Bill Me Later are valid payment methods as well.

Payment methods not allowed on eBay:

For most categories, sellers can't ask buyers to:

Send cash through the mail

Send cash or money orders through instant, point-to-point cash transfer services (that are not banks) such as Western Union or MoneyGram

Mail checks or money orders (except for items in categories specifically permitted below)

Pay through bank-to-bank transfers (except for items in categories specifically permitted below)

Pay by "topping off" a seller's prepaid credit or debit card

Pay using online or other payment methods not specifically permitted in this policy

Payment method exceptions

These payment methods may be used only in the listing categories described below:

Bank-to-bank transfers (also known as bank wire transfers and bank cash transfers)

Checks

Money orders

Online payment services: Allpay.net, cash2india, CertaPay, Checkfree.com, hyperwallet.com, Nochex.com, Ozpay.biz, XOOM

Listing categories:

Motors > Boats

Motors > Cars & Trucks

Motors > Collector Cars

Motors > Motorcycles

Motors > Powersports

Motors > Other Vehicles & Trailers

Motors > Parts & Accessories > Automotive Tools > Shop Equipment > Air Compressors

Motors > Parts & Accessories > Automotive Tools > Shop Equipment > Brake Lathes

Motors > Parts & Accessories > Automotive Tools > Shop Equipment > Frame Machines

Motors > Parts & Accessories > Automotive Tools > Shop Equipment > Lifts / Hoists / Jacks

Motors > Parts & Accessories > Automotive Tools > Shop Equipment > Paint Booths

Motors > Parts & Accessories > Automotive Tools > Shop Equipment > Tire Changers / Wheel Balancers

Motors > Parts & Accessories > Aviation Parts > Engines

Motors > Parts & Accessories > Boat Parts > Motors/Engines & Components > Outboard Motors > Over 200 hp

Motors > Parts & Accessories > Car & Truck Parts > Engines & Components

Motors > Parts & Accessories > Motorcycle Parts > American > Engines & Components

Motors > Parts & Accessories > Motorcycle Parts > Asian > Engines & Components

Motors > Parts & Accessories > Motorcycle Parts > British & European > Engine & Components

Motors > Parts & Accessories > Racing Parts > Auto Racing Parts > Engine & Components

Motors > Parts & Accessories > Salvage Parts Cars

Motors > Parts & Accessories > Vintage Car & Truck Parts > Engines & Components

Business & Industrial > Agriculture & Forestry > Farm Implements & Attachments

Business & Industrial > Agriculture & Forestry > Tractors & Farm Machinery

Business & Industrial > Construction > Buildings, Modular & Pre-Fab

Business & Industrial > Construction > Heavy Equip. Parts & Manuals

Business & Industrial > Construction > Heavy Equipment, Trailers

Business & Industrial > Healthcare, Lab & Life Science > Imaging & Aesthetics Equipment

Business & Industrial > Industrial Supply & MRO > Cleaning Equipment & Supplies > Sweepers & Scrubbers

Business & Industrial > Industrial Supply& MRO > Fork Lifts & Other Lifts

Business & Industrial > Industrial Supply & MRO > HVAC > HVAC Units

Business & Industrial > Manufacturing & Metalworking > Manufacturing Equipment

Business & Industrial > Manufacturing & Metalworking > Metalworking Equipment

Business & Industrial > Manufacturing & Metalworking > Woodworking > Equipment & Machinery

Business & Industrial > Printing & Graphic Arts > Bindery & Finishing Equipment

Business & Industrial > Printing & Graphic Arts > Commercial Printing Presses

Business & Industrial > Printing & Graphic Arts > Plotters, Wide Format Printing

Business & Industrial > Restaurant & Catering > Commercial Kitchen Equipment > Cooking & Warming Equipment > Ovens & Ranges

Business & Industrial > Restaurant & Catering > Concession Trailers & Carts > Concession Trailers

Business & Industrial > Restaurant & Catering > Refrigeration & Ice Machines

Real Estate

Everything Else > Adults Only


Communicating about payment methods

Sellers need to say in their listing specifically which payment methods they accept and only offer payment methods approved by eBay. Sellers aren't allowed to:

Ask buyers to contact them for additional payment methods

Offer a payment method to some buyers and not to others

Discourage buyers from using any payment method the seller specified in the listing

Ask buyers to pay using a method not mentioned in the listing.

This applies to all transaction-related correspondence between a seller and buyer as well as the listings.

Violation consequences

Make sure your listing follows our guidelines. If it doesn't, it may be removed, and your buying and selling privileges could be restricted.

 

[PJDeluhery]

A new reporting requirement, but the income has always been taxable.

Is the figure $20,000.00 or $2,000.00. I can't tell from your post. $20K seems high since everything else over $600 requires a 1099.

Thanks for this info.

 

[IXEC]

A new reporting requirement, but the income has always been taxable.

Is the figure $20,000.00 or $2,000.00. I can't tell from your post. $20K seems high since everything else over $600 requires a 1099.

Thanks for this info.

It's $20K....you will also be required to change you PayPal account to a "Business Account" if you now have a Standard or Premier Account.

 

[Gideon]

It's really nothing new with exception to having to switch to a business account. This means you will have to have a resale number, business license, etc which will identify on the state and local levels and you'll have to pay them too.

I report my paypal stuff - always have.

All that aside, one of the many things I appreciate with paypal which banks haven't caught onto is that they export to excel which makes breakdowns and reporting really easy.

You can also historic views going way the heck back like a few years. You'd have special order statements from your bank at a high fee to that otherwise.

 

[tdubel]

Actually, is this a good thing for me? Disclaimer, I am a CPA> I would be more than happy to have this reported, but you can bet your rump that the IRS will quickly be happy to have me not file. WHY? Reason is that I sell as a hobby, so I would be more than happy to compare my purchases to my sales. Since I am a cash basis, there is no inventory, it is all deemed purchases, therefore, at the end of the day, I would have a HUGE loss every year that would wipe out my real job income and leave me with a large refund.

However, all that said, it would be hobby loss and disqualified. Again, I think the IRS will be happy for me not to file.

TD

 

[Gideon]

Actually, is this a good thing for me? Disclaimer, I am a CPA> I would be more than happy to have this reported, but you can bet your rump that the IRS will quickly be happy to have me not file. WHY? Reason is that I sell as a hobby, so I would be more than happy to compare my purchases to my sales. Since I am a cash basis, there is no inventory, it is all deemed purchases, therefore, at the end of the day, I would have a HUGE loss every year that would wipe out my real job income and leave me with a large refund.

However, all that said, it would be hobby loss and disqualified. Again, I think the IRS will be happy for me not to file.

TD

So, what you're saying is that if a lot of people file and show losses then they stand to get refunds from the gov't?

So, the IRS has to pour over all this paperwork and then start cutting checks...

Yeah, they might not like this in the long run.

I only mention it that way because people would have to establish a business in order to have a business account with paypal. Tom, if you were to have an official business then the purchase amount of anything for the business is a write off. Show your losses and what do you actually wind up owing? Unless your location has a gross receipts tax.

 

[Njja]

Nothing new really. I have had a Paypal business account for years, if you receive over $400 in one month you are required to switch to a business account.

When I switched Paypal did not ask me for a tax ID or business license, they simply charge you a fee to receive money which they do not charge for a personal account.

 

[tdubel]

So, what you're saying is that if a lot of people file and show losses then they stand to get refunds from the gov't?

So, the IRS has to pour over all this paperwork and then start cutting checks...

Yeah, they might not like this in the long run.

I only mention it that way because people would have to establish a business in order to have a business account with paypal. Tom, if you were to have an official business then the purchase amount of anything for the business is a write off. Show your losses and what do you actually wind up owing? Unless your location has a gross receipts tax.

Gid,
for me, since it is a hobby, I would end up with a big "loss" on paper each year because my purchases will always exceed my sales. The reason I would get a refund is that this loss would go on page 1 against my wages, etc and I would end up with negative AGI, thus all of my withholdings from my "real job" would revert to me.

NOW, if 3 of 5 years results in a loss, the IRS COULD deem it a hobby and then make the loss unallowable.

Bottom line, I don't think they would want me or anyone in my position to be filing.

That said, I will follow the rules given.

TD

 

[jazzeum]

Nothing new really. I have had a Paypal business account for years, if you receive over $400 in one month you are required to switch to a business account.

When I switched Paypal did not ask me for a tax ID or business license, they simply charge you a fee to receive money which they do not charge for a personal account.

Ditto. I don't think I do 200 sell transactions yearly, although that averages out to about 17 a month. Sometimes I'm busy selling stuff but not consistently.

 

[Njja]

Yes I agree, if often comes down to the current "Ebay" special deals running!

 

[Phantom Warrior]

Nothing new really. I have had a Paypal business account for years, if you receive over $400 in one month you are required to switch to a business account.

When I switched Paypal did not ask me for a tax ID or business license, they simply charge you a fee to receive money which they do not charge for a personal account.

I wonder if that has been changed? $400 seems like a low amount. I have occasionally gone over $400 in one month and have only a Premier account. I can't apply for Merchant fee rates unless I have sales of $3000 per month.

Terry