Sending and receiving large amounts through PayPal

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khurramasgher

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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
 
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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?
 
how are you collecting payments from your customers? through paypal?
 
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.
 
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.
 
leonardodv said:
how are you collecting payments from your customers? through paypal?
Click to expand...
We will be collecting payements via e junkie and paypal but linked to his merchant account not my personal account.
 
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.
 
khurramasgher said:
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
Click to expand...

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.
 
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.
 
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.
 
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mikie46 said:
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.
Click to expand...

Actually PayPal does now state that they will report a 1099 for sales of over 20k.
 
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 :/
 
Get a buisness acount and avoid paypal as much as possible... They have a tendancy of screwing ppl over at their best moment
 
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.
 
Use WU or other wire transfer to your bank account, PP is not a good player when it comes to money.
 
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.
 
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.
 
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.
 
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.
 
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.
 
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