(Topic ID: 290092)

PayPal to start 1099 for everyone over $600

By Dr-Willy

3 years ago


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Topic Stats

  • 22 posts
  • 16 Pinsiders participating
  • Latest reply 2 years ago by barakandl
  • Topic is favorited by 3 Pinsiders

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    #1 3 years ago

    This is being discussed on KLOV at the moment so thought it might help to post here as I hadn’t seen it posted (if it is already please delete this thread). As this involves the stimulus package that was just passed please keep politics out of this discussion.

    PayPal is going to start sending everyone who earns over $600 a year through PayPal a 1099.

    So if you use PayPal as payment acceptance when selling machines be prepared to have to pay income tax on what you sell. This is only for goods and service option if you use friends and family it does not count, but with how many people are being scammed with friends and family it now seems like neither option is good. I also believe this encompasses other payment methods like Venmo, cash app, and the like.

    Here is a link to an article laying it out.

    https://runningwithmiles.boardingarea.com/paypal-payment-network-reporting-stimulus-bill/

    Just wanted to FYI anyone who missed it.

    #2 3 years ago

    “How many people being scammed”

    How many is it? I’ve heard of one bad transaction here on pinside.

    #3 3 years ago

    Keep in mind that the 1099 only reports how much you RECEIVED in total from a source, but it is up to YOU to report the COST BASIS of that same material. So say you buy a machine for $6000, and then SELL it for $7500 using PAYPAL good and services. You will get a 1099 showing $7500, but when you do income taxes you would show your cost for material as a $6000 deduction.... netting a taxable income of $1500. Now if you bought that machine and added $500 worth of Mods, then you report that as a deduction as well... lowering your taxable income again. Reporting 1099 INCOME and COST BASIS (and reconcilliation of them) is up to you!

    -1
    #4 3 years ago
    Quoted from nicoy3k:

    “How many people being scammed”
    How many is it? I’ve heard of one bad transaction here on pinside.

    There are many places people buy machines that don’t live within the pinside bubble.

    #5 3 years ago
    Quoted from Dr-Willy:

    There are many places people buy machines that don’t live within the pinside bubble.

    And you’re saying they are being scammed by PayPal friends and family?

    #6 3 years ago

    I only have one thing to say here.

    CASH.

    -1
    #7 3 years ago

    Damn

    Well it was a good 20-year run but the wild west had to be tamed sometime.

    SHouldn't affect me but this is a serious pain in the ass for countless mom and pop types.

    I'm new to venmo - is there a distinction there between "personal" payments and goods and services type things?

    #8 3 years ago

    Currently there are only four states that have the $600 threshold and Illinois has a $1000 threshold. All other states I believe is still 200 transactions and $20,000. I’m sure shortly though all states will move to the $600 threshold

    #9 3 years ago
    Quoted from CrazyLevi:

    Damn
    Well it was a good 20-year run but the wild west had to be tamed sometime.
    SHouldn't affect me but this is a serious pain in the ass for countless mom and pop types.
    I'm new to venmo - is there a distinction there between "personal" payments and goods and services type things?

    I don’t think so, but you may be limited in transaction size. Zelle is another option, but it has pretty low limits.

    #10 3 years ago

    Zelle is a non starter. Low transaction limits and inconsistent functionality between different banks.

    #11 3 years ago

    This has been discussed in another thread. But please don't delete this thread. What will the Etsy sellers do, I wonder. Short of hiring an accountant there must be an easy solution.

    #12 3 years ago

    PayPal has been sending 1099s to MA residents for a few years.

    #13 3 years ago
    Quoted from Yesh23:

    Currently there are only four states that have the $600 threshold and Illinois has a $1000 threshold. All other states I believe is still 200 transactions and $20,000. I’m sure shortly though all states will move to the $600 threshold

    Yes that is what this changing currently is that it’s now all states as of the passing of the stimulus

    #14 3 years ago
    Quoted from Dr-Willy:

    Yes that is what this changing currently is that it’s now all states as of the passing of the stimulus

    Don’t start to panic yet. It would not actually take effect until 2022 (2023 return year) and, as far as I have heard, the portion of the bill that directly pertains to taxes is “still being negotiated and could be amended.” Whatever the hell that means.

    Also, people should have been doing their part to keep track of net and gross online sales, keeping receipts and using spreadsheets to keep it organized. Otherwise, you will end up paying the max amount and in my opinion, you get what you deserve. 1099s are not a new thing, it’s just that it could actually be enforced by these large online marketplaces now.

    If you were doing what you should have been for the last 20 years anyway, you got nothing to worry about.

    #15 3 years ago
    Quoted from snyper2099:

    Don’t start to panic yet. It would not actually take effect until 2022 (2023 return year) and, as far as I have heard, the portion of the bill that directly pertains to taxes is “still being negotiated and could be amended.” Whatever the hell that means.
    Also, people should have been doing their part to keep track of net and gross online sales, keeping receipts and using spreadsheets to keep it organized. Otherwise, you will end up paying the max amount and in my opinion, you get what you deserve. 1099s are not a new thing, it’s just that it could actually be enforced by these large online marketplaces now.
    If you were doing what you should have been for the last 20 years anyway, you got nothing to worry about.

    I missed the 2022 year, thats good so at least people can adjust how they are using. It shouldnt affect to much as i mostly sell games via cash as they are picked up, i do sell parts and stuff though, but usually not enough that this is going to impact. I really just wanted to get the word out so it wasn't a surprise when it hit.

    6 months later
    #16 2 years ago
    Quoted from EJS:

    I only have one thing to say here.
    CASH.

    Now they are reporting deposits of $600 and more from your bank account. Welcome to the technocracy

    #17 2 years ago
    Quoted from BOBCADE:

    Now they are reporting deposits of $600 and more from your bank account. Welcome to the technocracy

    keep it under the mattress and guard it yourself!

    #18 2 years ago

    Deleted PayPal a few months ago.

    I don’t miss it at all. Any time your forced to use it for a vendor you can pay with a CC.

    Cashapp or Strike is great P2P

    #19 2 years ago

    PayPal does not like this, trust me. PayPal wants you to use their service and have money in your account. Its pressure from the government over anti money laundering. When it was 20K people would just create like 10 paypal accounts and keep everything under the limit to avoid taxes so they are making it harder

    If you are making money off of pinball start a small business and keep track of your expenses. You only pay taxes on profit. I'd rather keep it all myself too, but if you are writing a big check to the IRS it means you made money.

    #20 2 years ago

    Was a seller for over 20 years with close to 100k sales so it was a good run on eBay. I do wish I still had many of the arcade boards I sold cause they are worth a fortune now. From now on it's either friends and family or nothing when it comes to paypal.

    #21 2 years ago

    Write your congressman automatically to oppose the new bill here https://icba.quorum.us/campaign/IRSprivacy/

    #22 2 years ago
    Quoted from BOBCADE:

    Write your congressman automatically to oppose the new bill here https://icba.quorum.us/campaign/IRSprivacy/

    Probably just the IRS collecting names of tax evaders for further inspection.

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