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Using Stealth Accounts to Avoid Getting a Paypal 1099

Discussion in 'Ebay' started by David2k8, Jan 8, 2016.

  1. David2k8

    David2k8 Registered Member

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    I met somebody awhile back who told me they spread their ebay sales around over several paypal accounts to avoid getting a 1099 and reporting sales to the government. I haven't considered doing this, but totally understand why someone might.

    With tax time right around the corner and frequent talk about stealth accounts on BHW, I was wondering if anybody uses stealth paypal accounts specifically with the intention to spread there sales around to avoid getting a 1099? I would think you could even use the same ebay account and just change the email address the payment goes to connecting it to a different paypal account.

    For the people who are doing amazon-ebay drop-shipping it seems like this may make some sense.
     
  2. PapyrusMan

    PapyrusMan Newbie

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    The problem with the same eBay is that you create links to your other Paypal accounts, and I believe the idea of the stealth accounts are to create completely separate entities.
     
  3. David2k8

    David2k8 Registered Member

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    Yes, but the only point of the stealth account is to avoid the 1099 from paypal. It is my understanding that paypal sends out a 1099 when your account reaches a certain payment threshold, regardless of where the payments come from.
     
  4. toml3030

    toml3030 Elite Member

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    Yes, but unless you're selling fakes, or you're underage or something, it makes no sense to avoid the 1099 because you can make so much more money with an established large account. Remember, you are taxes on PROFITS, not revenue. It's not really that hard to keep taxes manageable if you keep good records.
     
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  5. David2k8

    David2k8 Registered Member

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    As long as you do not have any holds or limits on your paypal account I dont see how that will effect ebay sales. It looks like the same ebay account can be connected to different paypal accounts.
     
  6. toml3030

    toml3030 Elite Member

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    You realize that if you keep all your accounts small, you will never get premium placement in searches, right?

    Yes, but that defeats the purpose of having stealth accounts in the first place, as if one eBay account gets banned, all eBay accounts linked to that paypal will go down.
     
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  7. David2k8

    David2k8 Registered Member

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    This has nothing to do with getting banned from ebay and I dont think the age or status of your paypal account has anything to do with the placement of your auctions on ebay.

    This is for legit ebay sellers who are trying to spread their sales out over multiple/stealth PAYPAL accounts to avoid getting a 1099 from paypal. If possible, the goal would be to connect the different paypal accounts to the same ebay account.

    When listing an auction ebay asks for the paypal email address. Why cant that address be changed to another paypal account once you get close to the 1099 limits.
     
  8. toml3030

    toml3030 Elite Member

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    According the the eBay/Paypal separation agreement, they have access to each other's data, although reps who answer the phone can not see them.

    Look above.

    Because they will limit your paypal for suspicious activity. If you link multiple paypals to same eBay, PAYPAL links those accounts together. They don't need eBay cooperation at all to do this.
     
  9. PapyrusMan

    PapyrusMan Newbie

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    I agree with Tom here.
    David, when you say that you want to switch account as soon as you hit the tax threshold then you are forgoing the advantages of having an established store, as he states, you can gain preferential listing placement, cheaper fees and a few other things by having a main that you put all your effort into.
     
  10. David2k8

    David2k8 Registered Member

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    The ebay account would remain the same. What if you have multiple business's and want to use the same ebay account?

    I think the point of my post is being missed here.
     
  11. toml3030

    toml3030 Elite Member

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    No, I think you're missing the point that if you link multiple paypal accounts to same eBay account, PAYPAL will link PAYPAL accounts together by virtue of them being linked to same eBay account and either ban your paypal account or send you a 1099 for all your linked accounts, which defeats your whole purpose