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Author Topic: Anyone receive their 1099-K from Paypal yet?  (Read 6394 times)

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lisafx

« on: February 05, 2014, 19:13 »
0
Just curious if anyone's gotten a 1099 from paypal yet.  I have two accounts, neither of which met their stated threshold for getting a 1099 for 2012, but I got them for both accounts anyway. 

This year, I expected to get them and so far nothing.  I have them from all the micro sites that send them, but nothing from paypal so far.


« Reply #1 on: February 05, 2014, 19:53 »
+1
I have never receved any 1099 from paypal and have done deep 6 figures of business thru paypal. I have gotten 1099's from customers that have paid thru paypal.

« Reply #2 on: February 05, 2014, 20:13 »
+1
I've always ignored their requests for my numbers.

« Reply #3 on: February 05, 2014, 23:48 »
+1
I've never gotten one from them ever, didn't know they send them out ??? .... USA and have almost always made more than 700 a year

lisafx

« Reply #4 on: February 05, 2014, 23:51 »
0
thanks for the answers. Sounds like I just got unlucky last year. It has made me a little paranoid though, because now I'm expecting to get them. Going to contact PayPal and ask them what's up.

Uncle Pete

« Reply #5 on: February 06, 2014, 02:56 »
+1
Don't know why you got one last year Lisa? I'd guess it's a sign that you are doing well and they thought you could pass the thresholds?

The following is for information, in case someone reading the thread hasn't seen the details accurately reported.

"It should be noted that even though PayPal will require certain users to provide a TIN before crossing the reporting thresholds, we will not report any payments unless and until the user has crossed both thresholds in a calendar year," From a PayPal spokesperson

Credit card companies, online payment processors and other service providers will have to submit a 1099-K form reporting monthly sales information for sellers that execute a minimum of 200 transactions in a calendar year totaling at least $20,000 in overall revenue.

BOTH conditions must be met, it's not 200 transactions OR $20,000.

Some agencies, financial services, CC's (and PayPal is one) have chosen to report earnings below the required standards in some cases. Even though they are not required to.

This isn't going to answer much except listing the effects of the IRS regulations and what should be happening.

lisafx

« Reply #6 on: February 06, 2014, 14:11 »
0
Good info Pete.  That matches my understanding too.

Heard back from PayPal support today.  I didn't meet the threshold for receiving the 1099. I didn't come anywhere near the threshold last year either. Must have just been a mistake but I got them. At least it's good to know, Today so I can start getting my tax forms in order for my accountant.
« Last Edit: February 06, 2014, 14:13 by lisafx »

U11


« Reply #7 on: February 06, 2014, 14:29 »
0
Just curious if anyone's gotten a 1099 from paypal yet.  I have two accounts, neither of which met their stated threshold for getting a 1099 for 2012, but I got them for both accounts anyway. 
BTW You can have one Personal account and one Premier or Business account
but not two Personal. can be a big trouble for you if found by PP

Ron

« Reply #8 on: February 06, 2014, 14:37 »
0
Just curious if anyone's gotten a 1099 from paypal yet.  I have two accounts, neither of which met their stated threshold for getting a 1099 for 2012, but I got them for both accounts anyway. 
BTW You can have one Personal account and one Premier or Business account
but not two Personal. can be a big trouble for you if found by PP
Depends on how big your business is. You can certainly have more than 2 PayPal accounts.

U11


« Reply #9 on: February 06, 2014, 14:56 »
0
You can certainly have more than 2 PayPal accounts.
but no more then one "Personal"

Ron

« Reply #10 on: February 06, 2014, 15:04 »
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Correct, but we are talking businesses here. No photographer taking payments for selling images should use a personal account. Business transactions require a business account.

U11


« Reply #11 on: February 06, 2014, 15:10 »
0
some numbers here sounds more like a hobby, and I guess can be legally handled through Premier or even Individual account but sure, just ignore my comments then
« Last Edit: February 06, 2014, 15:12 by U11 »

Ron

« Reply #12 on: February 06, 2014, 15:20 »
0
The fact that we dont make much doesnt change the fact is business. We are selling something, even if its for cents and dimes, and so its a business transaction.

lisafx

« Reply #13 on: February 06, 2014, 15:36 »
0
Just curious if anyone's gotten a 1099 from paypal yet.  I have two accounts, neither of which met their stated threshold for getting a 1099 for 2012, but I got them for both accounts anyway. 
BTW You can have one Personal account and one Premier or Business account
but not two Personal. can be a big trouble for you if found by PP

No kidding.  One is business.  The other is just a side account for buying stuff online, ebay, etc.  But I got 1099'd on both last year.     

ruxpriencdiam

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« Reply #14 on: February 06, 2014, 16:27 »
0
Not true because it can also be classified as a hobby.

Just because you sell something, that in itself does not make it a business.

Anyone who does this as a hobby does it as just that and has no business license or business account.

Anyone who does this as a business has a license, possibly an LLC, a place where they conduct their business and have a business account for such at the bank.

A simple rule of thumb:
A business you make money, with a hobby you spend money.

If your activities have produced a profit for 3 of the past 5 years, you may presume it is for profit and is a "business"

Lots of people make money with their hobbies and are not a business just because they sell something.

The fact that we dont make much doesnt change the fact is business. We are selling something, even if its for cents and dimes, and so its a business transaction.

« Reply #15 on: February 06, 2014, 16:35 »
0
Being fairly new to stock ... can someone fill in the blanks for me. Why can I not use a personal account to receive payments? Are there legal reasons or is it an accounting issue?  Thnx.

« Reply #16 on: February 06, 2014, 17:25 »
0
http://www.irs.gov/uac/Is-Your-Hobby-a-For-Profit-Endeavor%3F

Is Your Hobby a For-Profit Endeavor?

FS-2008-23, June 2008
 
The Internal Revenue Service reminds taxpayers to follow appropriate guidelines when determining whether an activity is engaged in for profit, such as a business or investment activity, or is engaged in as a hobby.
 
Internal Revenue Code Section 183 (Activities Not Engaged in for Profit) limits deductions that can be claimed when an activity is not engaged in for profit. IRC 183 is sometimes referred to as the “hobby loss rule.”
 
Taxpayers may need a clearer understanding of what constitutes an activity engaged in for profit and the tax implications of incorrectly treating hobby activities as activities engaged in for profit. This educational fact sheet provides information for determining if an activity qualifies as an activity engaged in for profit and what limitations apply if the activity was not engaged in for profit.
 
Is your hobby really an activity engaged in for profit?
 
In general, taxpayers may deduct ordinary and necessary expenses for conducting a trade or business or for the production of income. Trade or business activities and activities engaged in for the production of income are activities engaged in for profit.
 
The following factors, although not all inclusive, may help you to determine whether your activity is an activity engaged in for profit or a hobby:
 •
Does the time and effort put into the activity indicate an intention to make a profit?
 
•
Do you depend on income from the activity?
 
•
If there are losses, are they due to circumstances beyond your control or did they occur in the start-up phase of the business?
 
•
Have you changed methods of operation to improve profitability?
 
•
Do you have the knowledge needed to carry on the activity as a successful business?
 
•
Have you made a profit in similar activities in the past?
 
•
Does the activity make a profit in some years?
 
•
Do you expect to make a profit in the future from the appreciation of assets used in the activity?
 

An activity is presumed for profit if it makes a profit in at least three of the last five tax years, including the current year (or at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses).
 
If an activity is not for profit, losses from that activity may not be used to offset other income. An activity produces a loss when related expenses exceed income. The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. It does not apply to corporations other than S corporations.
 
What are allowable hobby deductions under IRC 183?
 
If your activity is not carried on for profit, allowable deductions cannot exceed the gross receipts for the activity.
 
Deductions for hobby activities are claimed as itemized deductions on Schedule A, Form 1040. These deductions must be taken in the following order and only to the extent stated in each of three categories:
 •
Deductions that a taxpayer may claim for certain personal expenses, such as home mortgage interest and taxes, may be taken in full.
 
•
Deductions that don’t result in an adjustment to the basis of property, such as advertising, insurance premiums and wages, may be taken next, to the extent gross income for the activity is more than the deductions from the first category.
 
•
Deductions that reduce the basis of property, such as depreciation and amortization, are taken last, but only to the extent gross income for the activity is more than the deductions taken in the first two categories.

Related Item: Publication 535, Business Expenses

Page Last Reviewed or Updated: 04-Dec-2013
« Last Edit: February 06, 2014, 17:29 by old crow »


ruxpriencdiam

    This user is banned.
  • Location. Third stone from the sun
« Reply #17 on: February 06, 2014, 17:35 »
0

 •
Does the time and effort put into the activity indicate an intention to make a profit?No
 
•
Do you depend on income from the activity?No
 
•
If there are losses, are they due to circumstances beyond your control or did they occur in the start-up phase of the business?No
 
•
Have you changed methods of operation to improve profitability?No
 
•
Do you have the knowledge needed to carry on the activity as a successful business?Yes
 
•
Have you made a profit in similar activities in the past?No
 
•
Does the activity make a profit in some years?No
 
•
Do you expect to make a profit in the future from the appreciation of assets used in the activity?No
Hobby.

« Reply #18 on: February 06, 2014, 17:36 »
0
I understand all of that and report my earnings and expenses, etc., however, I still don't see why I would specifically need a separate Paypal account rather than use my personal account. I'm Canadian so there will be some differences in reporting, but I'm unclear. If my income from stock increased by a significant amount, I would likely channel it through a separate company, but not sure it is necessary at this point.

lisafx

« Reply #19 on: February 06, 2014, 18:00 »
0
I understand all of that and report my earnings and expenses, etc., however, I still don't see why I would specifically need a separate Paypal account rather than use my personal account. I'm Canadian so there will be some differences in reporting, but I'm unclear. If my income from stock increased by a significant amount, I would likely channel it through a separate company, but not sure it is necessary at this point.

I'm sure you can do it through your current paypal account.  Whether or not it is a business according to Canadian tax law is none of paypal's concern.  If they (Paypal) think you are doing enough business that you should convert to a business account, they will contact you to make the change.  That's what they did with me a number of years ago. 

« Reply #20 on: February 06, 2014, 18:13 »
+1
thx Lisa

« Reply #21 on: February 07, 2014, 08:53 »
0
I used to get one when my wife and I shared a paypal account. Then when this started, we split them up because I don't want to pay taxes for selling used stuff on ebay.

I do run all my photo expenses and earnings through an llc as a business. Paypal is just a way to receive payments. My business accounts are at a real bank.

Ron

« Reply #22 on: February 07, 2014, 09:15 »
0
In Europe PayPal is a bank, maybe thats why things are different for us.

« Reply #23 on: February 07, 2014, 11:42 »
0
I don't know if it's considered a bank or not. I don't think it is. http://money.howstuffworks.com/paypal7.htm

I do have a Paypal debit card in case I want access to the money immediately instead of the three day wait to transfer it.

But as far as I know, Paypal doesn't give loans, have savings accounts, sell CDs or other things that actual banks do. I don't think it's insured by the FDIC like banks are. I see no point in letting them hold my money any longer than I have to because I think they are a bigger target for fraud and hacking. It makes me nervous having my bank account tied to it, but I don't have much of a choice.
« Last Edit: February 07, 2014, 11:45 by robhainer »

Ron

« Reply #24 on: February 07, 2014, 12:38 »
0
In the US they arent, in Europe they are. They are licensed as a bank, regulated in Luxembourg. Without a banking licence they couldnt operate in the EU the way they do in the USA.

http://www.infoworld.com/t/business/paypal-granted-banking-license-in-europe-143

And they have buyer protection, so you will get your money back in case. No worries  ;)


 

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