Paypal and taxes. Please help

I am able to make $100 a week with a product/service I sell. I don't go through ebay or any other service besides paypal. I receive payments of $4 to $50 in my account which I set up using a family member's info. Almost all of the payments are sent as ?friends and family?.

I would like to keep the family member in the dark as much as possible, but never in hot water. Does the fact that these payments are ?gifts? and not sales relinquish some of the tax burden. I don't mind paying the tax, but don't want to disclose the nature of my product to the powers that be, due to their... gray nature. Or would that matter? That is, if I have 100 payments of $10, they could be for anything right? Could my family member just add the money as income without too many questions? I haven't put 600 on the account yet this year, and am hesitant to do so.

Should I make more accounts to disperse the amount?


Also, If I want to withdraw some of the funds without the family member's knowledge, could I order from bestbuy or another vendor that accepts pp, or would bestbuy somehow link my shipping address with paypal? What about in store pickup?



Sorry for so many questions, but I've been researching this for a while and need to get it figured out asap. Thanks in advance.

If you're using the family member's information without permission, then you could get in hot water. Usually called identity theft. The money put into the account by any means may be included as earned income. If the "gifts" are from hundreds of different people, then if audited, it would probably count as income and be subject to income tax. At least in the U.S. As for using PP to purchase products, most of the time it will use a preloaded shipping address of the PP owner. If it goes to a different address, the owner usually gets an email notification. Why don't you open a PP account in your own name, call it a business, then you wouldn't have to worry about it?

usually you don't have to pay taxes with paypal. I think if you receive over $20,000 or something they send you a w-9 form, or something like that.

Thanks. To your question Scoop... it's complicated. Unfortunately, I can't get into the details. I do have permission to use the account though. I mostly don't want to have to go through them for every withdrawal and for them to know how much I am making. That said, I COULD tell them, especially if they needed to report it.

I just read that paypal contacts the irs at 200 transactions or 20000. I might hit 200 in a year (but could avoid it) and would be well under 20k. I could avoid any bank transfers with ebay buys (sent to them) or the paypal vendor idea I mentioned. So nothing would actually go to their bank.

Regarding bestbuy, I maintain the pp email, so if the vendor contacted me regarding an address change on the shipment, it wouldn't be a big deal.
Thanks for your help.