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Sending and receiving large amounts through PayPal

Discussion in 'Business & Tax Advice' started by khurramasgher, Jul 5, 2012.

  1. khurramasgher

    khurramasgher Registered Member

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    Hello everyone.
    I have become a partner with a friend of mine who works overseas and owns a IT company . I will be sending him investments via PayPal and he will be returning investments and profits via PayPal as well.
    This will be done using my long-standing personal US verified pp account. My account will not be receiving any payments via any merchants like e junkie or something similar.

    We are hoping that if all goes well we will make a significant amount of money (20-30k per month split between us).

    Here is my question- I don't have any limits on sending or receiving payments. I understand pp will send me a 1099k after I receive a certain amount (20k I believe) and report to the IRS. This is totally ok with me as this is a completely legit business I will be investing in and I intend to pay all taxes owed based on my 1099. But do I need to setup a business account with pp or can I just use my personal pp account? Should I be worried about pp freezing my account if large amounts are coming in? Since I am not using the pp account to run a business but only to send and receive investment funds and profits do I need to have a pp business account?

    I want to do everything the correct way so any advice would be much appreciated.
    Thanks
     
  2. khurramasgher

    khurramasgher Registered Member

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    I have no issue setting up a business checking account and making/registering a sole proprietor LLC account if thats the best way to do it but do I really need to do that?
     
  3. leonardodv

    leonardodv Junior Member

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    how are you collecting payments from your customers? through paypal?
     
  4. NatashaNixon

    NatashaNixon Jr. VIP Jr. VIP

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    If your account is a couple years old and active, you shouldn't have a problem, though they will most likely ask you to provide some personal info if you're getting a big lump sum.
     
  5. mmalivuk

    mmalivuk Newbie

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    If you're dealing with particularly large sums you'd be better off with a bank transfer or WU or something. PP scares me whenever I NEED the money.
     
  6. khurramasgher

    khurramasgher Registered Member

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    We will be collecting payements via e junkie and paypal but linked to his merchant account not my personal account.
     
  7. browndog24

    browndog24 Newbie

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    I know a lot of people are afraid to use paypal but I have used them for many years without any problems. I have ran up large amounts thru them and small amounts. The only problem is their fee's. If you are processing over 10k a month I suggest you look to your local banks or other banks you'd be surprise what they offer nowadays.
     
  8. viralmediaent

    viralmediaent Newbie

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    When I started seeing over 30K$/Month they put a 50% Reserve on my account. Pretty soon I'll be able to buy a house with the money thats being held in there.
     
  9. burnett4congress

    burnett4congress Jr. VIP Jr. VIP Premium Member

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    Change your PayPal account to a business account. You'll need to incorporate in some fashion first. Generally LLCs and S-Corps are best for this because then you can pass through other business activity losses to offset your income.

    If you do this as a sole proprietor, you'll get killed on your taxes.

    Find a good tax accountant to help you with this if you need it.
     
  10. mikie46

    mikie46 Jr. VIP Jr. VIP

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    Iv received way more than 100k in funds from various merchants who pay me though paypal which i have promptly moved to my appropriate bank accounts over the years and PP has never provided a 1099. So im not sure where thats coming from but no, PPL does not provided a 1099. Thats the merchants responsiblity.
     
    Last edited: Aug 14, 2012
  11. khurramasgher

    khurramasgher Registered Member

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    Actually PayPal does now state that they will report a 1099 for sales of over 20k.
     
  12. Yashiro

    Yashiro Newbie

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    lol man paypal is really annoying and strict when it comes to large amounts, even if you're 100% legit it'll take time to give them the information they need :/
     
  13. lolhippl

    lolhippl Newbie

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    Get a buisness acount and avoid paypal as much as possible... They have a tendancy of screwing ppl over at their best moment
     
  14. zenoGlitch

    zenoGlitch Executive VIP Jr. VIP Premium Member

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    Why are you going to risk getting your funds frozen for 180 days just for the convenience of paypal? As a former victim I would highly recommend that you send and receive money via bank wire.
     
  15. ice41

    ice41 Power Member

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    Use WU or other wire transfer to your bank account, PP is not a good player when it comes to money.
     
  16. -ReX-

    -ReX- Power Member

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    Paypal can and will freeze your account for up to 180 days (it say they can freeze or limit anyone they want in thier T&Cs) so i suggest you just use bank transfer or WU.
     
  17. HostStage

    HostStage Jr. VIP Jr. VIP Premium Member UnGagged Attendee

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    Don't play with the fire, as you aren't sure how PP would behave. For paypal it would be an oddity on your account and that's the main reason why they might block.
    Bank Wire should be the way to go here.
     
  18. dariobl

    dariobl BANNED BANNED

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    Use Western Union, you can still pay via credit card on their web site if you create and verify the account, and it is way more professional way of sending money :D
    And your partner will receive the money in same minute when you send it.
     
  19. dbyrn

    dbyrn Power Member

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    It's better to get the business account. However I think you should consider another way of transferring money unless you really love surprises.

    D.
     
  20. sleepdegree

    sleepdegree Registered Member

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    Get with a union to reduce processing fees. If your bent on paypal you'll need a merchant account definitely. Also talk with an accountant.