Primarily Petroliana Shop Talk Forums Thread Like Summary - PayPal tax report

I'm confused. Different press articles say different things.
A 1099k form to be issued after $600 total received.
One article says " friends and family " transactions exempt.
Anybody checked with a " Tax advisor" yet?

Just one more reason why I won't sell on Ebay,or use Paypal.

I dont think friends and family is affected, as those are not suppose to be "goods". If you get paid for goods via F&F, technically you are suppose to file on those but it wont trigger a 1099.

Any payment service is affected, Venmo included. It's not ebay, paypal, venmo, doing this, they are responding to government regulation unfortunately.

I think Facebook marketplace is OK for now, but paypal will get you if they pay through there I think.

I think the thing to do is have a cost basis ready to go on everything. We are collecting every receipt we can get. Here's some info:

https://newsroom.paypal-corp.com/20...ing-Requirements-Your-Questions-Answered

If a seller does not have a sales tax account number and pays tax on items to resell, that tax, the cost of the item, shipping and other legit expenses are deducted from his gross sales to get a net profit that is taxed as income.

A vendor who charges sales tax gets an account number from the state. He uses that number when he buys inventory to resell and doesn't pay a sales tax on it. He also can deduct inventory costs and other expenses to determine taxable net profit income.

PayPal

Tax rules have changed
We’ve got you covered with all the details:
Beginning January 1, 2022, the IRS implemented new reporting guidelines for individuals receiving goods and services payments on PayPal and other platforms totaling $600 or more per year.

So what exactly does this mean for you?

Well, if you’re getting payments from friends and family members, this won’t apply (lucky you!). Friends and family payments are things like splitting a bill, sharing apartment expenses, or paying back friends. None of these are reported.


The new tax requirements only apply to goods and services payments. These transactions are tagged in the app by a buyer, indicating they’re purchasing something like a couch from a seller. Payments received by a Seller Profile are also goods and services payments.

If you receive over $600 in goods and services payments, we’ll automatically keep track of these payments and provide you with a 1099-K form at the end of the year. If your tax info is not complete, we’ll reach out to you with instructions.

And remember, this only applies to receiving goods and services payments. Payments that you send are not reported.


This info isn’t tax advice. Please consult your tax advisor about these. If you need more info, you can learn more here.