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Ebay and Paypal tax question (US)

Discussion in 'Ebay' started by pleaseview, Jun 7, 2014.

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  1. pleaseview

    pleaseview Newbie

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    So I understand the $20k rule, where after that amount I have to give my SSN and file taxes (W-9)

    To avoid this I opened a paypal in a foreign country (I already had a bank account) and I'm sending all my payments thru there and withdrawing to that bank account.

    For right now, I'm pretty small time (1-2K per month). My question is how do I avoid the computers detecting me and freezing my paypal.

    Should I setup another user on my computer that goes thru a foreign VPN (same country as paypal) and only login thru there, while still logging into ebay from the US as normal?

    Any advice would be appreciated

    Thanks!
     
  2. JoeMongan

    JoeMongan Jr. VIP Jr. VIP Premium Member

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    First of all PP can request a SSN or EIN number before that mark. 20K is just the limit where
    they are forced to collect that data. If you have a PP account in another country then you need
    to use an ip address from that country.
     
  3. pleaseview

    pleaseview Newbie

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    At some point will ebay ask why is your paypal international, since my goods are US based n shipped - or do they not care?
     
  4. burnett4congress

    burnett4congress Jr. VIP Jr. VIP Premium Member

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    You are probably going to have a FATCA problem regardless. It's a $100k fine or half the money in the account, whichever is greater, for willful violations.

    Structure your business as a business, file your tax returns, and you won't have this problem.
     
  5. pleaseview

    pleaseview Newbie

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    I only have to report it if the account goes over $50k at anypoint in the year. Which it hasn't and doubt it will (if I spend it fast enough lol).

    BTW how do taxes work on ebay sales, percentage of sales or profit? Can you give me a breakdown of approx what u pay (as a percent)
     
  6. burnett4congress

    burnett4congress Jr. VIP Jr. VIP Premium Member

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    FATCA reporting is required if the combined total of all foreign investment/bank accounts exceeds $10k at any given point during the year, not $50k.

    Income taxes from any business activities, including eBay sales, are calculated based on the net profit of your activities.
     
  7. pleaseview

    pleaseview Newbie

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    FBAR is 10k, FATCA is 50k.

    Either way it isn't relevant, the IRS isn't looking for ppl with 20k parked overseas.

    Back to my original questions, 1. will ebay object to my foreign paypal and 2. apart from VPN what other steps do I take to keep my paypal running smooth.