Questions about 1099

[nleg]

I am confused about eBay/Paypal sending me a 1099 for the sales I've made this year. I have read both e

Bay's and Paypal's policies and I just wanted to make sure I understood correctly.

In order to receive a 1099 you have to reach the 200 sales limit AND make over $20,000. I am confused if it was either or both together.

So, if I have over 200 sales, but make under $20,000 I will not receive a 1099. The only way I will receive a 1099 is if I have over 200 sales and made $20,000 or more.

Thanks in advance for your help.

[bar-29368]

They are separate companies so they will only issue you a 1099 if you reach the threshold with THAT company alone.

And just to clarify the threshold is 200 or more transactions AND $20k or more in sales.

[nleg]

I don't understand. I will only receive a 1099 from Paypal not eBay?

[mam98031]

@bar-29368 is correct.  Ebay and PP are two completely separate companies and therefore would be issuing their own reports for what happens on their respective site.  Companies can not mix up their accounting like that without severe and long reaching issues.

So if you are in MP or are entering MP next month.  All your sales that run through MP will be reported to IRS via a 1099k if you meet the threshold of 200 transactions and at least $20,000 in sales.  The same holds true for PP and what they might have processed for you before you moved over to MP.

It is important to remember that with or without a 1099K.  Whether or not you meet the thresholds of 200 transactions and $20,000 per year, you are still suppose to report your income on your federal tax reports.  There is no minimum threshold for this on your IRS federal returns.  If you sell here, everything needs to be tracked and properly reported on your federal tax returns whether you sell $200 or $20,000.

[nobody*s_perfect]

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@nleg wrote:

I don't understand. I will only receive a 1099 from Paypal not eBay?

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If PayPal processes over $20K for you during 2020, AND if there were over 200 transactions, then PayPal will send you a 1099-K.

If you are in Managed Payments, then eBay (not PayPal) is processing your payments.  If eBay processes over $20K/200 transactions, then eBay will send you a 1099-K.

So depending on when you sign up for Managed Payments and the number and value of your transactions before and after  that date, you could get 1099-K's from both eBay and PayPal, or from just one of them, or from neither.

If you are in Massachusetts or Vermont, the threshold is $600, not $20K.

[mam98031]

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@nobody*s_perfect wrote:

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@nleg wrote:

I don't understand. I will only receive a 1099 from Paypal not eBay?

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If PayPal processes over $20K for you during 2020, AND if there were over 200 transactions, then PayPal will send you a 1099-K.

If you are in Managed Payments, then eBay (not PayPal) is processing your payments.  If eBay processes over $20K/200 transactions, then eBay will send you a 1099-K.

So depending on when you sign up for Managed Payments and the number and value of your transactions before and after  that date, you could get 1099-K's from both eBay and PayPal, or from just one of them, or from neither.

If you are in Massachusetts or Vermont, the threshold is $600, not $20K.

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@nobody*s_perfect 

Just a curiosity question.  So in those two states the state rules trumps the federal rules?  So if those two states said the threshold was $30K then IRS would comply?

[dhbookds]

The state income tax laws are in addition to the fed laws....... i.e. states can demand lower reporting for their tax systems.... Tho a tax payer will get the 1099 for the state......it won't go to the Feds.........or at least it isn't required to be sent to the Feds.......

If the states were to require $30,000......instead of the Fed $20,000, the state would not get the 1099 for $20,000---29,999, the Feds would get it for $20,000. 

Theoretically......... I don't know but what everybody gets everything and their particular system just ignores what doesn't apply to them......