Kinda OT: PayPal 1099-K - it’s a doozy!

[NYCfixie]

Originally Posted by 54ny77

yet another reason i hate paypal.

much prefer checks, and thankful some paceliners from whom i've purchased stuff don't mind checks either.

have used paypal too, but it's a rarity and will only use if it's a screaming deal or an item i literally can't find anywhere new online or at lbs.

I hate craislist too and most of the a-holes who buy on it (cheap low-balling d-bags who ask tons of questions and then disappear or show up and did not bring the funds you agreed too) but local cash transactions have their advantages. Cash is king IMHO.

[cachagua]

Shift over to venmo... postal money orders...

Bitcoin?

[fignon's barber]

Be sure to deduct $.565/mile for mileage ridden.

[FlashUNC]

Just one other aspect of this to consider -- yes, the law can be annoying from a tax enforcement perspective -- but those thresholds are also part of PayPal's anti-money laundering and Patriot Act compliance regime that they have to follow as a US money transmitter.

They have to track this stuff to thwart money laundering of all sorts and, yanno, possible terrorist financing concerns. Getting dinged as a part of the IRS rules around it is just another knock-on effect to the whole thing.

[oldpotatoe]

Originally Posted by FlashUNC

Just one other aspect of this to consider -- yes, the law can be annoying from a tax enforcement perspective -- but those thresholds are also part of PayPal's anti-money laundering and Patriot Act compliance regime that they have to follow as a US money transmitter.

They have to track this stuff to thwart money laundering of all sorts and, yanno, possible terrorist financing concerns. Getting dinged as a part of the IRS rules around it is just another knock-on effect to the whole thing.

There’s a yuge political punch line there(maybe 2 or 3)but ya know, I’ll keep me yap shut..

[ultraman6970]

IMO uncle sam could do it better, because in other countries if you have the sligth thing in your tax return you will be called soon to clear the problem and not 3 or 10 years after... right there months after the dude dropped the tax return in the mail. Here is like winning the lotto, allowing people to lie in their tax returns, would be decades to get the winner ticket and get audit.

As for ebay i believe is fair what they do setting up a cap before you get a tax thing from them. After all is not the same to sell an ocasional set of bibs than sell stuff every month eventhought is not a store you know.

[quickfeet]

Any way to Check and see if a PayPal user is getting something like this? I already filed my taxes and haven’t received anything like this yet, but definitely have had a fair amount of money go through PayPal this year.

[NYCfixie]

I got home, checked my mail, and realized I got dinged by PayPal too.

What is so stupid is that it was for one transaction for less than $2000 that was reversed:
- Laptop listed with ship to 48 CONUS only. Mentioned in the listing and eBay ship settings were correct.
- Some a-hole from Poland with a shipping forward address service in USA used the buy-it-now feature and paid immediately.
- I refused to ship.
- He refused to relent.
- I opened a case with eBay and won. Seller and final value fees refunded.
- I opened a case with PayPal and won. PayPal fees refunded.
- Money was refunded by Payal to buyer.
- The money never left my PayPal account.

How the hell is this fair? Now I need to add this to my taxes.

[Clean39T]

Originally Posted by NYCfixie

I got home, checked my mail, and realized I got dinged by PayPal too.

What is so stupid is that it was for one transaction for less than $2000 that was reversed:
- Laptop listed with ship to 48 CONUS only. Mentioned in the listing and eBay ship settings were correct.
- Some a-hole from Poland with a shipping forward address service in USA used the buy-it-now feature and paid immediately.
- I refused to ship.
- He refused to relent.
- I opened a case with eBay and won. Seller and final value fees refunded.
- I opened a case with PayPal and won. PayPal fees refunded.
- Money was refunded by Payal to buyer.
- The money never left my PayPal account.

How the hell is this fair? Now I need to add this to my taxes.

I'd ask PayPal for an amended one. They screwed up probably $2K worth of transactions on mine.

[NYCfixie]

Originally Posted by Clean39T

I'd ask PayPal for an amended one. They screwed up probably $2K worth of transactions on mine.

How did you go about requesting the updated form? Call, eMail? How difficult was it to make them update and send you a new one?

They are usually a PITA do deal with.

[Clean39T]

Originally Posted by NYCfixie

How did you go about requesting the updated form? Call, eMail? How difficult was it to make them update and send you a new one?

They are usually a PITA do deal with.

Haven't done that myself. I'm planning on just noting it in the spreadsheet I'm putting together showing all of my sales as offset by purchases. So for example, for the ActiveJunky Reward, I'll mark it as a $200 purchase to offset what they marked as a $200 sale. Who knows if this would hold up to an audit, but I gotta do what I can do for now. If it gets ugly, I'll put in more leg work at that point.

[fignon's barber]

Originally Posted by eBAUMANN

My plan is to treat it like I would if I was self employed or if this was the "small business" they seem to think it is. That is, go through all 72 transactions that a fee was paid on, find some sort of evidence of what was paid for the items sold...add up all of what I paid and subtract from the total gross amount as a write-off "business expense"...then report the difference, which would either be profit or loss.

Its such a small amount of money I really cant see them coming after me no matter what I end up filing...especially with the state of the gov't/IRS these days...

That number is 1-866-455-7438, for all of you in the same boat.

I can't see how this would cost any of you guys any money, especially if you are reselling stuff that was bought used and held for a short period of time, like a frameset or bike. The impact of depreciation is small. Plus, the 15% that Ebay/Paypal charge is a deductible expense as well as shipping.
For example, you buy a frame for $1k and sell it on Ebay for $1k. You have no capital gain, but you get a $150 deduction( for fees) plus a shipping expense deduction if you free ship(say, $50). That's a $200 deduction. Not bad. Clean39T, you have 20 or so of these transactions, and you might be getting a nice benefit.

[unterhausen]

it wouldn't cost them anything had they realized they needed to keep records.

[binxnyrwarrsoul]

What is the trigger? The $20K or the 200 transactions?

[likebikes]

just checked my tax docs on paypal, no 1099-k!