Welcome to the Quilting Board!

Already a member? Login above
loginabove
OR
To post questions, help other quilters and reduce advertising (like the one on your left), join our quilting community. It's free!

Results 1 to 21 of 21

Thread: PAYPAL~info just released for PAYPAL users/sellers

  1. #1
    Power Poster dreamer2009's Avatar
    Join Date
    Nov 2008
    Location
    WHERE THE SUN ALWAYS SHINES
    Posts
    10,151
    Blog Entries
    7
    *
    What Is IRS 6050W?

    Under the new legislation, PayPal will be required to report to the IRS the total payment volume received by PayPal customers in the US who:
    o Receive more than $20,000 in gross payment volume in a single year, AND
    o Receive 200 or more payments in a single year.

    The IRS changes will apply to all payment providers, including PayPal. They will take effect on January 1, 2011, with the first reports going to the IRS in early 2012. Our goal is to help PayPal merchants to understand and comply with the new requirements.

    If you meet the stated thresholds, you will be required to verify your identity by adding a SSN/TIN/EIN to your existing account. If you are currently using a Personal or Premier account, you will be required to upgrade to a Business account.
    *
    When Do the IRS Changes Go into Effect?

    IRS 6050W covers all transactions in the tax year 2011 and each tax year that follows. Beginning in 2012, qualifying merchants will receive a 1099-K Form either electronically or by mail. Transactions occurring prior to 2011 will not be affected by this legislation.
    *
    Will All Merchants Receive 1099s?

    No. Only merchants who receive over $20,000 in gross payment volume AND receive 200 or more payments in a calendar year will receive Form 1099-K electronically or by mail.
    *
    How Will I Know if IRS 6050W Impacts Me?

    If a merchant meets both thresholds by receiving over $20,000 in gross payment volume AND 200 or more payments in a calendar year, PayPal will send Form 1099-K electronically or by mail for the 2011 tax year. This document will be made available in January 2012.
    *
    What does PayPal need from a Merchant as a result of the IRS changes?

    Starting in 2010, PayPal will be asking impacted merchants to update their account by adding their SSN/TIN/EIN to their existing account(s). This information will only be requested from merchants that are potentially impacted by these requirements. If you are required to add this info, we will notify you via email and include an alert in your Account Overview.
    *
    How Do I Read a 1099?

    PayPal is working with its merchants to help them understand the new requirements. Please refer to the links section on this site for more info on the process and forms. Also keep an eye out for upcoming information updates.
    *
    Will I Be Affected by the 2011 Tax Changes if I Only Meet One of the Thresholds?

    No. A merchant has to pass BOTH thresholds ($20,000 in gross sales volume and 200 transactions) in 2011 to qualify for the new requirements. A business receiving $10,000 in payments per year would not be affected by the new requirements.
    *
    Will PayPal Help Me with My Tax Return?

    While we're committed to helping our customers understand the 2011 tax changes, PayPal is not qualified to give you specific tax guidance. Please contact a tax professional.
    *
    What can I expect from PayPal?

    This is an important legislative change for online sellers, so we want to provide clear and helpful information. We'll update this site frequently with more FAQs and resource links to help you make sense of IRS 6050W.
    *
    Are non-profit organizations affected by the new IRS Tax Law 6050W?

    Non-profits are treated the same as for-profits. Non-profits will be required to submit their SSN/TIN/EIN as well. Non-profit merchants will need to work with their tax professional to determine how they will need to file their taxes going forward, if they arenít already.
    *
    Are personal payment transactions received counted in the total that will be reported to the IRS?

    Yes. All payments received by an account will be used when calculating the total payment volume received.
    *
    How is the $20,000 calculated? Will it be calculated based on net or gross transaction earnings?

    The $20,000 will be calculated by looking at a merchantís gross sales volume.
    *
    Who is the Business Contact Name?

    The Business Contact Name is the individualís name that was provided to the IRS when applying for your TIN or EIN. This is the name that should be listed on your account when verifying your identity. If the name listed on your account is not correct, please upload or fax your documents by following the links on your account.
    *
    What is a SSN/TIN/EIN?

    SSN = Social Security Number
    TIN = Tax Identification Number
    EIN Ė Employee Identification Number
    Depending on your business type, all three of these numbers can be used to verify your identity with the IRS.
    *
    Will I have to upgrade to a business account?

    If you meet the thresholds outlined by the IRS and are currently using a Personal or Premier account, we ask that you upgrade to a Business account. The upgrade process is quick, easy and free and provides you with more access to helpful PayPal features and products. Upgrade now.
    *
    What happens if I donít verify my identity?

    If you do not verify your identity, a restriction will be placed on your account until you do so. You will be unable to send, receive or withdraw funds from your account until you verify your identity.
    *
    If I have multiple accounts that, when combined, meet the thresholds, but individually they donít, will I still qualify?
    Yes. PayPal and all other payment processors will report sales and transaction volume to the IRS by SSN/TIN/EIN.

    For example, if you have two accounts tied to the same SSN/TIN/EIN with the following payment levels:
    o Account A - $18,000 in sales and 180 transactions
    o Account B - $2,000 in sales and 20 transactions

    Your accounts will qualify under the new regulation.

    IRS 6050W
    The PayPal Blog

    The latest news, views, and insights about the 2011 tax changes.
    General Tax Info
    IRS Virtual Workshop

    Video-based tax instruction for the small business and self-employed.
    Business.gov

    Small business tax advice, resources, and publications from the IRS.
    Microsoft

    How-to articles on taxes, expenses, and more.
    Yahoo

    Tax answers for the home-based business.
    About.com

    Tax tips, accounting procedures, and more.
    TurboTax

    Small business tax software, tax deductions, and tax preparation.
    Convey

    Tax reporting software for Forms 1099, 1098, 5498, and W2.

  2. #2
    Power Poster
    Join Date
    Mar 2010
    Location
    North Texas
    Posts
    10,710
    Blog Entries
    36
    OK I am cancelling my paypal account as of 12/31/10 Thanks for the heads up. I won't ever make that much but will go to checks and cash. This is so sad. We already paid taxes on it when we bought it, now paying again.

  3. #3
    Senior Member ljsunflower's Avatar
    Join Date
    Dec 2008
    Posts
    897
    We pay too many taxes already. This is just crap!

  4. #4
    Senior Member dgsmom's Avatar
    Join Date
    Oct 2009
    Location
    SHAMROCK, OK
    Posts
    606
    wow, i can't believe they can't leave things alone. i just opened a paypal but looks like too much trouble, will have to rethink paypal now. thanks for the info.

  5. #5
    Super Member moonrise's Avatar
    Join Date
    May 2010
    Location
    Northwest Georgia
    Posts
    2,987
    I didn't read the whole thing word-by-word, but from the information at the top, it probably won't affect anyone here, unless you're an actual business or are a serious, serious destasher. ;)

    o Receive more than $20,000 in gross payment volume in a single year, AND
    o Receive 200 or more payments in a single year.

    "And", not "or". That "and" helps the average destasher or casual seller a lot. :)

  6. #6
    Super Member Scissor Queen's Avatar
    Join Date
    Jul 2009
    Location
    Southwest Kansas
    Posts
    4,829
    Quote Originally Posted by debbieumphress
    OK I am cancelling my paypal account as of 12/31/10 Thanks for the heads up. I won't ever make that much but will go to checks and cash. This is so sad. We already paid taxes on it when we bought it, now paying again.
    This does not mean you have to pay taxes on the entire amount reported by Paypal. It means you need to keep records of what you paid for the items you're selling and keep track of your other business expenses and file a schedule C with your tax return.

  7. #7
    Power Poster
    Join Date
    Mar 2010
    Location
    North Texas
    Posts
    10,710
    Blog Entries
    36
    Quote Originally Posted by Scissor Queen
    Quote Originally Posted by debbieumphress
    OK I am cancelling my paypal account as of 12/31/10 Thanks for the heads up. I won't ever make that much but will go to checks and cash. This is so sad. We already paid taxes on it when we bought it, now paying again.
    This does not mean you have to pay taxes on the entire amount reported by Paypal. It means you need to keep records of what you paid for the items you're selling and keep track of your other business expenses and file a schedule C with your tax return.
    Thank you. I read your post and re-read it and I don't think it will affect the destashers. Thanks for sharing. YOu seem very knowledgeable in the taxes. ANd thanks Dreamer2009 to.

  8. #8
    Super Member C.Cal Quilt Girl's Avatar
    Join Date
    Jun 2010
    Location
    Central Ca
    Posts
    2,620
    Good Information, don't have a pay pal account but can understand how taxes should be applied to all sales.
    not that I don't agree we pay alot now:)
    Thanks for Sharing

  9. #9
    Senior Member quiltergirl80's Avatar
    Join Date
    Jun 2010
    Location
    nw washington
    Posts
    907
    guess the irs wants taxes on any income we earn, no matter if we paid tax on it originally

  10. #10
    Senior Member maggie2122's Avatar
    Join Date
    Sep 2010
    Location
    Michigan
    Posts
    832
    Don't think I'll ever have to worry about doing 20 grand worth of business on paypal. Not even if I sold my whole stash!

  11. #11
    Senior Member
    Join Date
    Apr 2010
    Location
    Missouri, USA
    Posts
    334
    Anyone who earns $20,000 income should have to report it, no matter how it's earned. Waiters and Waitresses have to report their tips as income. I don't see the difference, except that a person who sells on eBay and receives payments through PayPal doesn't stand on his/her feet and carry heavy food trays as a waiter or waitress does. $20,000 in earnings indicates a person has an eBay business, which isn't the same thing as a person selling outgrown clothes or items sold after a home decluttering.

  12. #12
    Super Member ptquilts's Avatar
    Join Date
    Jun 2010
    Location
    Vermont
    Posts
    5,911
    I don't know, have you ever seen Hoarders? Some of those people could make 20K in a yard sale...

  13. #13
    Senior Member aliaslaceygreen's Avatar
    Join Date
    Dec 2009
    Location
    South Chesterfield, Virginia
    Posts
    727
    Quote Originally Posted by Bobby's Girl
    Anyone who earns $20,000 income should have to report it, no matter how it's earned. Waiters and Waitresses have to report their tips as income. I don't see the difference, except that a person who sells on eBay and receives payments through PayPal doesn't stand on his/her feet and carry heavy food trays as a waiter or waitress does. $20,000 in earnings indicates a person has an eBay business, which isn't the same thing as a person selling outgrown clothes or items sold after a home decluttering.
    This.

  14. #14
    Senior Member Born2Sew's Avatar
    Join Date
    Mar 2010
    Location
    North Central Texas
    Posts
    656
    Technically even garage sale income is taxable. Virtually ANY income is considered taxable by the IRS. Granted, I doubt anyone ever reports this type of income. Any time anyone earns at least $600.00 or more lets say in contract wages, the payer is required to issue a 1099 for those wages. Just so you know....

    Frankly, I am surprised that they placed the amount at $20,000. Many sellers will be fortunate there.

  15. #15
    Power Poster sandpat's Avatar
    Join Date
    Sep 2007
    Posts
    18,757
    Blog Entries
    9
    I agree with Born2Sew. I've always thought it wasn't fair that people didn't report "cash" income when they should.

    I think this allows the casual seller to have a little extra$..but catches the ones who are truly running a business but haven't been paying their share.

    I don't think it will effect many of the destashers on the board.

  16. #16
    Super Member LindaR's Avatar
    Join Date
    Dec 2008
    Location
    Michigan
    Posts
    2,943
    Blog Entries
    1
    Quote Originally Posted by moonrise
    I didn't read the whole thing word-by-word, but from the information at the top, it probably won't affect anyone here, unless you're an actual business or are a serious, serious destasher. ;)

    o Receive more than $20,000 in gross payment volume in a single year, AND
    o Receive 200 or more payments in a single year.

    "And", not "or". That "and" helps the average destasher or casual seller a lot. :)
    this is the way I read it also...we who only deal periodically or sell occasionally are not "dealers"....

  17. #17
    Power Poster dreamer2009's Avatar
    Join Date
    Nov 2008
    Location
    WHERE THE SUN ALWAYS SHINES
    Posts
    10,151
    Blog Entries
    7
    Quote Originally Posted by LindaR
    Quote Originally Posted by moonrise
    I didn't read the whole thing word-by-word, but from the information at the top, it probably won't affect anyone here, unless you're an actual business or are a serious, serious destasher. ;)

    o Receive more than $20,000 in gross payment volume in a single year, AND
    o Receive 200 or more payments in a single year.

    "And", not "or". That "and" helps the average destasher or casual seller a lot. :)
    this is the way I read it also...we who only deal periodically or sell occasionally are not "dealers"....
    when we first got the info about this happening it stated "OR" and I believe there was so much static from the garage sale type person that it was changed to "AND". Ebay would have taken a massive hit losing all the garage salers.
    Another thing to think about is that with our economy people have been making ends meet by what they are doing instead of going out and robbing people / places. They need to put food on the table.

  18. #18
    Power Poster dreamer2009's Avatar
    Join Date
    Nov 2008
    Location
    WHERE THE SUN ALWAYS SHINES
    Posts
    10,151
    Blog Entries
    7
    Quote Originally Posted by sandpat
    I agree with Born2Sew. I've always thought it wasn't fair that people didn't report "cash" income when they should.

    I think this allows the casual seller to have a little extra$..but catches the ones who are truly running a business but haven't been paying their share.

    I don't think it will effect many of the destashers on the board.
    sandpat, I agree with your opinion whole heartedly. Millions of dollars have been made and not paid taxes. wrong on so many levels.
    I started selling off the contents of a 20' storage locker and needed an outlet to do it that would work for me. I didn't ask for the hit & run accident that disabled me and stuck me in a life where I couldn't afford to buy decent food to eat. I felt I had the right to sell my property for food and meds. and warm clothing.
    Thankfully the storage is now almost empty and I don't have to worry about the changes but I literally had to list vintage quilts and a ton of other vintage linens for barely nothing just to get it done this year because of the changes that they changed anyhow.

  19. #19
    Super Member Joan's Avatar
    Join Date
    Jul 2007
    Location
    Pine Grove, California
    Posts
    2,846
    This doesn't surprise me and I expected it was coming.

    The good news is that it isn't going to affect us who sell occasionally on E Bay.

    I used to sell lots of small items but only in my dreams did I ever gross $20,000!

    (Like others have said, if they made the cash they need to pay the tax.....)

  20. #20
    Power Poster nativetexan's Avatar
    Join Date
    Feb 2009
    Location
    home again, after 27 yrs!
    Posts
    15,778
    Blog Entries
    2
    don't we just LOVE our government changes? sigh. i just ignore them as best i can.

  21. #21
    Power Poster dreamer2009's Avatar
    Join Date
    Nov 2008
    Location
    WHERE THE SUN ALWAYS SHINES
    Posts
    10,151
    Blog Entries
    7
    Quote Originally Posted by nativetexan
    don't we just LOVE our government changes? sigh. i just ignore them as best i can.
    ROFLMBO

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

SEO by vBSEO ©2011, Crawlability, Inc.