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THe 1099-K form for ebay and paypal how to file taxes??

Discussion in 'Ebay' started by ryanster01, Jun 29, 2011.

  1. ryanster01

    ryanster01 Newbie

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    So I started Dropshipping Last year.
    My Gross Sales is going to hit 20,000 next month probably.
    I already hit 200 payments.
    Paypal has already asked for tax id or ssn
    In paypal im a Sole Proprietorship. on a Business account.
    I do not have a business license.

    So should i close up shop?
    Get a business license?
    Schedule C?
    What is it going to do if sent to me?

    What are you guys doing?
    fo you already report and how?
     
  2. JesusBack

    JesusBack Executive VIP Premium Member

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    Business license won't be the problem, the fact that you haven't filed tax forms at all could definitely be an issue with the IRS. I started using paypal in november and I was already with with the 20k problem by the end of january.

    I didn't submit my SSN, I waited about a month to make a new LLC and submitted that instead.
     
  3. eBayMafia

    eBayMafia BANNED BANNED

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    Yeah, and keep in mind, PayPal doesn't want just a Federal EIN, they will go after you pretty hard for a SS. Mostly because PayPal and eBay employees are told to "get a SS" and have no idea what an EIN even is, and are mostly a non-U.S. resident. I recommend switching to a LLC and saying that your business is owned by three people, at 33.33% each. PayPal/eBay won't like this, they want someone to be solely responsible. Sometimes people get shut down by eBay/PayPal at this specific point, or they are passed through. Both have happened to me. This is one of the main reasons I rotate several eBay accounts at once and I shut them down once they reach a predetermined limit of gross sales. In my experience of meeting small business owners that sell on eBay and Amazon exclusively, this is very very common.

    Submitting a SS# is a large amount of risk in my opinion, and if you do not have good credit, PayPal's system may lock you out and freeze your funds for 6 months, and it's likely that your actually eBay account will be negatively affected. I have good credit, and I've been limited by PayPal before.
     
  4. ryanster01

    ryanster01 Newbie

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    well if I add my SSn to Paypal. and make a profit and lost statement and do a schedule C how honest do i have to be on the schedule C? and be a sole proprietor. and file taxes. should i even meation pre 2011 stuff?

    THanks