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Paypal and CRA/IRS

Discussion in 'Business & Tax Advice' started by phatzilla, Jan 30, 2012.

  1. Jan 30, 2012
    #1
    phatzilla

    phatzilla Jr. VIP Jr. VIP

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    I was under the impression that paypal divulges your income to the CRA / IRS.


    But what if you withdraw to your corporations bank account instead of your personal one, are you still taxed the same way as if you were withdrawing straight into your checking account?

    I guess what i'm asking is if you're taxed when you receive the money into your paypal account, or when you actually withdraw it to a bank account...
     
  2. Jan 30, 2012
    #2
    olajames123

    olajames123 Newbie

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    needs a paypal with balance of 1500$ usd
     
  3. Jan 31, 2012
    #3
    volund

    volund Senior Member

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    They will only file a 1099 if you reach certain limits


    PayPal will send you and the IRS a copy of your Form 1099-K for the 2011 tax year in accordance with Internal Revenue Code Section 6050W. Under the new rule, PayPal is required to report the total payment volume received by any payee that:

    · Received more than $20,000 in gross payment volume from sales of goods or services in 2011, AND
    · Received more than 200 separate payments in 2011.
     
  4. Feb 7, 2012
    #4
    jonnyquest

    jonnyquest Regular Member

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    Depends on how you setup your PayPal account, personal or business. If you move it (cash) into an S-Corp you are not double-taxed otherwise in a C-Corp you will be taxed twice.

    Regardless of what anybody sends you just report all income. Otherwise the IRS will ambush you years later.

    JQ

    NOT LEGAL ADVISE ABOVE...seel proper legal help
     
  5. Feb 8, 2012
    #5
    volund

    volund Senior Member

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    How you are taxed on it depends on how you are filing your taxes. Paypal nor the Bank pull out any taxes. You need to know how you plan to file at the end of the year and pay your taxes accordingly. Also remember you are not taxed on how much money comes in but on the actual profit.
     
  6. Feb 8, 2012
    #6
    BrianSipe

    BrianSipe Newbie

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    im reading around the net that the thresholds they stated, they are not following WHATSOEVER. class action coming soon?
     
  7. Feb 8, 2012
    #7
    volund

    volund Senior Member

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    Class action for what? Reporting income to the Govt that people were supposed to be reporting anyway? I can see the line of questioning now.

    Why are you upset that Paypal reported your income?

    Well I was planning on not reporting it and cheating on my taxes....


    Yeah that will go far.....
     
  8. Feb 8, 2012
    #8
    SilverSultan

    SilverSultan Regular Member

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    Damn that is why I dislike the paypal so much, but it seems to have wiped out their competition.
     
  9. Feb 9, 2012
    #9
    volund

    volund Senior Member

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    While there are a lot of reasons to dislike Paypal this is really not one of them. This thing is probably costing them a lot of money to deal with and is not something they want to do. The IRS is putting the screws to them because they know damn well that a very large number of people are making money and not claiming it on their taxes. The Govt want their piece of the pie so they are trying to close up the ways people hide income.