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1099k from PayPal and Third Party Network Transactions

Pitfall69Pitfall69 0 miles to Legoboy's houseMember Posts: 11,218
edited February 2013 in Buying & Selling Topics
Has anyone received a 1099k from PayPal or from a company that processes your credit card transactions? The new IRS guidelines state that people/business that accept credit card payments or payments via PayPal will receive a 1099k and income from those transactions will be reported to the IRS. This is for people with at least $20,000 in receipts and 200 transactions.

I am just curious because I own a business and I received several 1099k's and I m wondering if anyone who sells a lot of Lego received these as well.

Comments

  • y2joshy2josh Member Posts: 2,002
    I got one as well, but my normal business runs mostly through PayPal transactions, so this wasn't much of a surprise. I doubt my LEGO sales by themselves would even come close to qualifying.
  • Pitfall69Pitfall69 0 miles to Legoboy's houseMember Posts: 11,218
    This has really messed me up because I have several independent contractors use the same credit card machine and all those transactions are reported to the IRS yet only 1/8 of those transactions we are responsible for.
  • y2joshy2josh Member Posts: 2,002
    I had a similar issue where, at the beginning of the year, before I'd really thought about it, I'd sell various knick knacks and old junk I didn't want on eBay. I have a separate eBay account for that, but not a separate PayPal account, so it reported all of the transactions, even the ones the IRS would consider 'hobby' transactions. At the end of the day, it wasn't worth the hassle to not just lump it into revenue and pay a bit more in taxes, but I imagine yours is a very different case.
  • samiam391samiam391 A Log Cabin in KY, United StatesMember Posts: 4,233
    I was fully expecting one, but never got it.

    Calculations show I may have just slipped by, which I'm more than fine with.
  • sidersddsidersdd USAMember Posts: 2,432
    Yep, got one last year and this year. My PayPal account is used 99% for LEGO reselling activity.
    kylejohnson11
  • Pitfall69Pitfall69 0 miles to Legoboy's houseMember Posts: 11,218
    I imagine if you selling enough Legos or whatever to receive a 1099k that you would go ahead and make it a legitimate business and deduct expenses. I not just talking about you @sidersdd, but everyone who sells a ton of things online.
  • sidersddsidersdd USAMember Posts: 2,432
    ^ it's legitimate in that I report and pay my taxes on it each year, yes.
    kylejohnson11
  • Pitfall69Pitfall69 0 miles to Legoboy's houseMember Posts: 11,218
    ^Yeah, that's what I was getting at. If you are going to pay taxes, you might as well declare yourself as a business and deduct expenses to lower your taxable revenue.
  • kylejohnson11kylejohnson11 Member Posts: 508
    I do not sell enough to get a 1099K, but I still file a schedule C.
    Pitfall69
  • sidersddsidersdd USAMember Posts: 2,432
    ^ there are some gray areas (hobby/business; expenses/personal use; etc), and details of which I'll keep between me and my accountant (and Uncle Sam if he asks).
    Pitfall69
  • Pitfall69Pitfall69 0 miles to Legoboy's houseMember Posts: 11,218
    ^Please do :)
  • samiam391samiam391 A Log Cabin in KY, United StatesMember Posts: 4,233
    sidersdd said:

    (and Uncle Sam if he asks).

    No... no questions asked.


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