Does Ebay or Paypal report our sales to IRS?

[janies_bizz]

I just started selling on Ebay and Im a little worried about reporting my extra little income. Its not that much but is there like a certain amount that I have to make for them to report or how does this work? Any help would be appreciated. Tax time is near.

[gr8buyfromme]

Ok,
So the original Question or "topic" was never answered.

Does Ebay report your total sales for the year too? IE...your sales on Ebay totaled 30k but your Paypal payment receipts totaled 18k??? Is the IRS gonna get a letter stating how many completed sales from EBay I KNOW paypal has to report because it processes payments but since Ebay is merely a Venue to sell are they included in that or unincluded because they dont actually process payments? I know that Ebay owns Paypal but they are two separate companies.

Just a factual answer please, no guesses, I can do that myself...Thanks

[turn-turn-turn11]

The way I understand it, Paypal will give the IRS the total amount of those who make over 200 sales and $20,000. Not buyer by buyer, but by total dollar amount of all those that fall into their criteria unless the IRS asks for a more detailed assessment.

Anyone who sells on Ebay is considered to be a business owner because they derrive income from selling. Or so it seems that we make money until you start taking the expenses as tax deductions. There isn't much difference tax-wise whether you sell on Ebay or if you rent a spot in a co-op shop. You still have business income and expenses and you are considered to be a business owner unless you are selling for another company or organization. Go to the IRS website and run off a copy of the Sch. C and its instructions. It gives you a lot of insight, tax-wise, into what's a tax deductible expense and what's not.

[bostongrammy]

Ok,
So the original Question or "topic" was never answered.

Does Ebay report your total sales for the year too? ...

No.

[northeast_chileman]

No.

Looks like 1/2 dot com is?

"We're writing to let you know that starting with transactions occurring on or after January 1, 2011, new Internal Revenue Service (IRS) regulations require Half.com (and other businesses that process payments) to file a Form 1099-K for all sellers with more than 200 transactions and $20,000 USD in sales per year.

If you're a high-volume seller who has met or is close to meeting the IRS thresholds, we may need to generate a Form 1099-K for you. If you have multiple accounts, we'll take all of them into consideration when calculating your volume status. If you exceed the IRS thresholds, we'll send your first Form 1099-K to you in early 2012. Your Form 1099-K will give you a consolidated report of all payments received through Half.com for 2011. This information will also be reported to the IRS.

Assuming you continue to exceed the IRS thresholds, we will send a Form 1099-K to you annually, and we'll also report your payments to the IRS. If your Half.com volume does not exceed the IRS thresholds in a particular year, you will not receive a Form 1099-K and we will not report any amounts to the IRS for that year, even if you have given us your Taxpayer Identification Number (TIN) and Social Security Number (SSN).

Next steps
To prepare your Form 1099-K (when required), we need either your TIN or SSN for our records. Your TIN/SSN will be kept secure in compliance with the applicable laws and our privacy and information security policies.

You'll be able to give us your TIN/SSN online in the Personal Information section of My Account. We'll let you know when this feature is available, and we'll email you to remind you that we need your TIN/SSN number. You'll never be asked to provide your TIN/SSN over the phone. For security purposes, please don't call with or email us your TIN/SSN.

If you don't provide us with your TIN/SSN before you meet the thresholds, payments to your account could be frozen, we may be required to withhold taxes from your payments, your listings could be removed, and your ability to sell on Half.com could be suspended, in addition to other consequences. We want to avoid any disruption to your selling status, so please make sure you give us your TIN/SSN when we request it."

[bostongrammy]

" Internal Revenue Service (IRS) regulations require Half.com (and other businesses that process payments) to file a Form 1099-K for all sellers with more than 200 transactions and $20,000 USD in sales per year. .."

Half.com proceses payments. So do Paypal and the various banks that process merchant credit cards. But eBay does not.

[savwillsell09]

its simple,if you get a 1099,the irs gets a copy,if you dont do anything you get honked for the full amount...:_|

[northeast_chileman]

Title of this thread?

Does Ebay or Paypal report our sales to IRS?


Correct answer, PayPal & Half dot Com... Granny?

[barton_super_store]

When I first started ebay I heard as long as we don't make 500.00 a month we didn't have to file taxes. Never heard about 200 sales..That is easy if you sell 99 cent items. 20,000 a year seems like a taxable amount. This is all I know about this subject, I need to study more about this subject. Seems we pay ebay enough they should tell us the rules. Thanks

I recently started selling on eBay. I just kind of fell into it when i was fired from my previous work and decided to sell off all the inventory I had instead of return it to the company that stuck it to me. long story short i ran into some other products by the 3rd week and by the end of my fourth month(DECEMBER2010) I hit Silver PowerSeller and Top Rated Seller status with just under $16k in sales for that month!

I am curious, when I started this account I decided to get a quick business name from the IRS and register it with my Local State. I then use that number to set up a business ebay and paypal account. This was all done from
9/1/10-12/31/10. during this time my first 5k was paid into the original paypal business acount, but paypal closed it down. and so I used my sisters premier account for receiving the majority of my payments. Will my ebay sells be reported matched with my paypal account or will they only report the sales/payments that I received in my own business account?


With given information above the questions i have is:
Will they report my sales to the IRS through the Business FIN? Right now I have to file my quarterly business taxes.
What should I report? Ebay sales?($26k total for 3 months) or business paypal account(which is now limited and I only received the first 5k of payments into this account?
Does non of it matter because neithe ebay or paypal will report anything because it was 2010 and they are only reporting from 2011 and on?

[kansas_gal06]

 my advice is to ask PayPal rather than trust the answer of some random person on the internet.


Personally, I would file on the correct total amount. For example businesses that take personal checks don't get to just leave out that income and only report credit card sales...they have to report all income.

[bostongrammy]

"Does non of it matter because neithe ebay or paypal will report anything because it was 2010 and they are only reporting from 2011 and on?"

PayPal will not be reporting anybody's 2010 sales to the IRS.

"my first 5k was paid into the original paypal business acount, but paypal closed it down. and so I used my sisters premier account for receiving the majority of my payments."

By using your sister's account you are setting up a potentially very messy situation for next year and even for this year, since if the IRS looks into her finances the income will be considered to be her income not yours.

The 1099's that PayPal will send out one year from now, based on 2011 transactions, will report that income as being the income of the person who owns the PayPal account.

[kansas_gal06]

[quote mid="524581810]....By using your sister's account you are setting up a potentially very messy situation for next year and even for this year, since if the IRS looks into her finances the income will be considered to be her income not yours.
...quote]

That's what I was thinking, too. It could get sorted out eventually if there was proof taxes WERE paid but you're right - very messy!

[proof256]

I found this at this link:

http://ebay-stores-etc.blogspot.com/2008/08/paypal-has-to-report-to-irs-ebay.html

Paypal Has To Report To IRS (eBay Sellers)
The new Housing and Economic Recovery Act signed into law requires Paypal and others to report to the IRS. This law will take affect in 2011 and will be reported in 2012 for the 2011 tax year.

You are excluded from having your info reported if:

1. If you receive less than $20,000 a year in payments; and
2. If you have less than 200 payments.

You will have to make sure you keep good records. For more information visit the offical Paypal Blog for more information.

That is not exactly true, ebay is REQUIRED to REPORT if you have over $20,000 and over 200 payments,

They MAY report anything and everything and I wouldn't be surprised if they do.

MANY "LOCAL" communities and "STATES" are targeting Ebay for lost tax revenue and applying political pressure for EVERYTHING to be reported.

[savwillsell09]

even if you do not get a 1099?,please be sure to report all income.
its your duty,obligation as a law abiding, honest u.s. citizen
do not defraud the government
the great OZ has spoken!

[stefs_clothing]

To all those who are not sure whether or not their income will be reported in 2011:

Everything SHOULD be reported, whether or not you surpass the $20,000 and 200 transactions.

Just do your taxes like you are supposed to do, as required by law, and you won't be playing the guessing game you are playing.

If you are scared of having to pay the IRS, don't be. All you have to do is keep track of expenses and deduct them. I don't owe the IRS a penny for my 2010 income because of the deductions I got to use. If you've never done your own business taxes before, hire a CPA and listen to them and learn from them as they help you with yours, and you will have the knowledge to do them the next year by yourself.

If you've never kept track of your expenses, now is the time to start.

[kansas_gal06]

....
All you have to do is keep track of expenses and deduct them. I don't owe the IRS a penny for my 2010 income because of the deductions I got to use.
....
.

Same here, for me. I do not owe anything for my 2010 eBay sales. I didn't have a profit.