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Paypal taxes

Discussion in 'Business & Tax Advice' started by BackY, May 13, 2013.

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  1. BackY

    BackY Senior Member

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    Hello guys, I was wondering if one needs to pay taxes at the end of the year if a lot of money is going through the paypal account. Do the taxes apply only when you withdraw the money to your card, or you have to pay them anyways.

    What if I only receive the money in my paypal, and I spend them right away without putting them on my card?
    What are the tax rate in USA and Germany? Is there a way to avoid these stupid fees?

    THank you!
     
  2. davids355

    davids355 Jr. VIP Jr. VIP Premium Member

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    My accountant tells me to treat paypal like a bank account, so I basically send him an annotated version of my paypal statement.

    So yes, I think you do have to pay tax on it. And if you have incoming and outgoing, you declare the income as sales and the outgoing as costs I guess.

    Remember you still need to declare your tax even if you don't make any profit, or even if you are in the tax allowance.

    Anyway, all that is for UK tax, and it assumes you are staying legal :)
     
  3. loclhero

    loclhero Supreme Member

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    if you're in the usa and are being paid by check by any reputable company, they are going to send you a 1099 at the end of the year if you made $600 or more. The IRS also gets a copy showing yo umade the money. you have to file a return and it is income that is taxed. paypal has nothing to do with it. this is pretty simple stuff bro.
     
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  4. BackY

    BackY Senior Member

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    thats what i thought too lol. so no taxes if I use paypal, and specaialy if I dont make any withdraw, but spend the money right away via paypal, right?
     
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