Anybody here receive a 1099-K from having a Paypal account? This is directed to non-businesses. Those that are making a few extra dollars from property already owned by selling their stuff on eBay. Did you report it and how? Schedule C?

The government must be really hard up these days...When you go for your garage sale permit next you will have to fill out 1099 for said G sale, in a sense their the same..

That's kind of crappy. It's not like they paid you anything, they are essentially your bank account.

 

Then again, Pay Pal sucks for far more reasons than this.

Did you get one paul..

I did get one from my merchant account. It gets reported as "Gross receipts and sales" on Schedule C. The wife got one from Paypal. She is not a business, but I guess it has to be reported as such. LINK

If you have a paypal business account, which most bigger sellers do, and as any individual should (lower fees), they have hte right to send the 1099k, I got one for my intuit merchant account, but not paypal.

 

I am not an accountant, but you have to report your cost of goods sold against that 1099k. I don't know if the 1099k by paypal is reported to the IRS, or if it is for your info only though.

 

They may be required to send you a copy, but not required to report it themselves if that makes sense.

 

Same as brokerage statements in 1099B. Mutual funds, stocks etc, get reported, but options transactions and certain other derivatives do not get reported to the IRS, however on the 1099B Extended to give you the info which you ought to report to the IRS yourself.

The merchant service providers do have to report all accounts over $20K/year to the IRS, however for this year, the IRS says to include it in your "gross receipts and sales" and not separately. The Schedule C has a separate line for reporting next year when they figure out what they are doing.

 

From what I have read since starting this thread, anything that you sell online and make a profit from is taxable, including that treadmill sitting in the basement. Of course the figure on the 1099-K only has a total amount that was transferred to you. You must deduct the cost of eBay fees, Paypal fees, shipping and cost of goods, like you know what you paid for that treadmill 5 years ago.

 

Perhaps $20K is high enough to be considered a business and no longer a hobby, but who are they to set that limit? Why didn't the IRS come out with a special form for non-businesses? They just made it confusing for people.

If you have a paypal business account, which most bigger sellers do, and as any individual should (lower fees), they have hte right to send the 1099k, I got one for my intuit merchant account, but not paypal.

 

I thought this was new for 2011?

 

Same as brokerage statements in 1099B. Mutual funds, stocks etc, get reported, but options transactions and certain other derivatives do not get reported to the IRS, however on the 1099B Extended to give you the info which you ought to report to the IRS yourself.

 

I don't think it's the same at all. First, it's new. Second, if I have mutual funds, stocks, etc., I am investing to make a profit. There is zero doubt about that. I'm not buying mutual funds to juice vegatables for breakfast every morning. Or to rake leaves.

 

If I want to clear the junk out of my garage, there is no way I have receipts for everything me and my parents bought during our entire lives to establish expenses vs. gross. There is no comparison.

 

BTW, my business bank accounts do not send 1099s to me or the IRS. Including personal, corps, LLCs, and DBAs. I consider Pay Pal to be the same as a bank account. It's an account for the purpose of transactions with others.

 

I understand why they are doing it, but it is new and I don't like it. And it's not the same.