This site supposedly helps one organize all this data, including paypal data, for making the tax job easier
Accounting Software for Etsy Sellers
here's the Paypal info page on the subject
https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/IRS6050W
Note this ONLY includes payments for the "Sales of Goods or Services"
i.e. further down -
"Are personal payments that I receive counted in the total that will be reported to the IRS?
No. Personal payments that are not payments for the sale of goods or services will not be counted when determining if the IRS thresholds have been reached and will not be included on your Form 1099-K if you exceed the thresholds. However, all payments received for the sale of goods or services will be used to calculate the gross payment volume to be reported. PayPal monitors accounts to ensure that personal payments are not being used for sales of goods and services."
Accounting Software for Etsy Sellers
here's the Paypal info page on the subject
https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/IRS6050W
Note this ONLY includes payments for the "Sales of Goods or Services"
i.e. further down -
"Are personal payments that I receive counted in the total that will be reported to the IRS?
No. Personal payments that are not payments for the sale of goods or services will not be counted when determining if the IRS thresholds have been reached and will not be included on your Form 1099-K if you exceed the thresholds. However, all payments received for the sale of goods or services will be used to calculate the gross payment volume to be reported. PayPal monitors accounts to ensure that personal payments are not being used for sales of goods and services."
I don't get it. What exactly is the problem here? You're a business. You sell stuff and collect money for it. How does the 1099-K change anything? As best as I can make of it, you're complaining because the new rule makes it more difficult for you to cheat on your taxes. Is that the issue here? I mean, you would be reporting this income even without the 1099-K, wouldn't you?
se
se
The TechDIY store operates breakeven (at best) -- before this there was no issue of filing IRS 1040-C, with the Feds and state -- there was no income to be reported on Schedule C. If you're not set up correctly, the 1099K results in being taxed on gross receipts, not net profit. See this morning's NY Times article by James Stuart on the NY real estate developer whose combined federal, state and city taxes amounted to 102% of his adjusted gross income.
I'm also confused, I thought the 1099 simply stated items that were entered anyway. For sillyness say my tenants filed a 1099 for the rent they paid, I go about filling out exactly the same tedious forms. A break even business should still have a low tax burden.
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Jack,
It is a real pain when you do something like your store, do your best, primarily for fun and then have someone complain about some issue that is really theirs.
Such a venture requires quite a bit to make it a profitable and rewarding venture.
So if you want to stop doing it and move on to something that you enjoy more, that is a good idea. Just don't blame it on taxes or tax forms. There actually are some of us who take pride in doing and paying our taxes, as strange as that may be to others!
ES
I think what he's trying to say is....His business should not have to consume an inordinate amount of time "paper pushing"
If one takes 33% of their time pushing paper with the other 66% actually DOING business.........then the 'Paper business' is the pre-dominate business.
Businesses are in business for producing, creating, building, not pushing, shuffling papers across a desk just so someone far far away can say OK! "Your doing it right".
_____________________________________________________Rick..........
If one takes 33% of their time pushing paper with the other 66% actually DOING business.........then the 'Paper business' is the pre-dominate business.
Businesses are in business for producing, creating, building, not pushing, shuffling papers across a desk just so someone far far away can say OK! "Your doing it right".
_____________________________________________________Rick..........
What paper pushing?
He says his beef is with the new 1099-K. I don't see how that results in any more paper pushing. At least not for him. It's more paper pushing for PayPal since they're the ones who have to actually file it with the IRS.
All the 1099-K does is report the total payments he's received through PayPal. Payments he would be reporting on his tax forms anyway. And all PayPal sends you is your copy for your records so you know what PayPal has reported to the IRS.
And that seems to be what his REAL beef is. Now the IRS knows how much he's received in payments through PayPal. Kind of hard to engage in tax evasion when the IRS knows what you've actually received.
se
What added forms? There are no added forms. The only added forms are on PayPal's end. They're the ones who fill out and file the 1099-K, not the business. You don't even have to file a copy of the 1099-K like you do with a regular 1099 or a W2. PayPal has already filed the copy with the IRS. And as I said previously, that seems to be what his real beef is.
se
Jack,
I have run three group buys on DIY Audio since coming here some 5 years ago. Each year I got auditied for not showing the proceeds on my IRS return. It seems that big brother watches paypal transactions and questions anything dubious. I had no real problems explaining that it was all non profit, however, it gets you to wondering how much big brother knows about the small fish, like myself. I never made over 80,000 in one year in my life.
The really good financial deals us diyer's find are usually from individuals purchasing quality merchandise in bulk and transferring the savings to us. I sometimes wish the third party would stay out of our lives. My next door neighbor included.
Tad
I have run three group buys on DIY Audio since coming here some 5 years ago. Each year I got auditied for not showing the proceeds on my IRS return. It seems that big brother watches paypal transactions and questions anything dubious. I had no real problems explaining that it was all non profit, however, it gets you to wondering how much big brother knows about the small fish, like myself. I never made over 80,000 in one year in my life.
The really good financial deals us diyer's find are usually from individuals purchasing quality merchandise in bulk and transferring the savings to us. I sometimes wish the third party would stay out of our lives. My next door neighbor included.
Tad
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