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Will paypal report my earnings?

Discussion in 'Business & Tax Advice' started by ryeguy, Oct 19, 2009.

  1. ryeguy

    ryeguy Junior Member

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    I have a program that I created and have been selling (link in sig). I've made a few grand off of it. I'm selling it through paypal (using e-junkie.com's merchant store), so obviously my income is not being taxed. Do I absolutely have to claim this, or are the chances of the IRS finding this out pretty much nil?
     
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  2. ForeverNever

    ForeverNever Power Member

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    I think it can be requested by the IRS but I don't believe they will report it.
     
  3. omgreally

    omgreally Guest

    A bill that impacts merchants with Paypal account goes in effect 2011 (that's how I read it anyways). But in order for Paypal to report a customers payment volumes, the customer must meet this criteria:

    " 1. receive more than $20,000 in payment volume in a single year; and
    2. receive more than 200 payments in a single year."


    you can read more about it here: https://www.thepaypalblog.com/2008/08/proposed-irs-reporting-requirements-become-law/
     
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  4. Realign02

    Realign02 Regular Member

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    Unless you made a really big amount of money, it shouldn't be a problem. They usually only notice when they see large sums of money moving around.
     
  5. justsomeguy

    justsomeguy Junior Member

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    This is good to know as I was wondering the same thing.. Cheers guys.
     
  6. justsomeguy

    justsomeguy Junior Member

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    Question if you earn more $20,000 but get paid it in less than 200 payments will they still report you?
     
  7. Lurking

    Lurking Junior Member

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    "Only payees with more than $20,000 in processed receipts and more than 200 transactions for the year must be reported."

    You must have both.
     
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  8. KBC-12

    KBC-12 Regular Member

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    I am glad you posted this question as was wondering this as well.

    Regarding enjunkie,

    1. Are you able to display a pay pal button and/or a have customers send payments to your pay pal email address?
    (I have a verified account account, trying to make keep "buyer confidence" w/ the Pay Pal name.)

    2. Can you sell a product via ejunkie for instant download w/ no website/hosting?
     
  9. RichUser

    RichUser Regular Member

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    I know half a dozen people that ran a decent amount of operations through Paypal, and now have been audited by the IRS for those earnings, and being fined. Many of them are scattering for attorney's and accountants. I HIGHLY recommend that you report all your income.
     
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  10. cathy

    cathy Junior Member

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    The 1/2 dozen people you know do you have any idea of what thier earnings were? Maybe they made a little too much money??
     
  11. danielgb123

    danielgb123 Regular Member

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    What if you're under 18?
     
  12. showbizvet

    showbizvet Power Member

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    I'm pretty sure you are safe.. but of course should the IRS request the info... they'll hand it over in a split second. If you were making a ton of cash, you could have a 2nd paypal... OR... just a good tax attorney or accountant. Once you reach that level of income, there are a lot of loopholes to use. But it is always dangerous to thwart (or try to) the IRS
     
  13. zeroa

    zeroa Newbie

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    More than $20,000 in earnings and over 200 payments?
     
  14. RichUser

    RichUser Regular Member

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    Most of them had less than that.
     
  15. evilman11

    evilman11 Junior Member

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    im glad this doesn't go into effect till 2011 or id have to pay taxes on my earnings :(
     
  16. noph34r

    noph34r Regular Member

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    Before or after you have to pay taxes, wherever you live.

    Don't spend all the money you earn and save a part for the tax season.

    You could find legit tricks to pay less and this is a job for accountants.
     
  17. omgreally

    omgreally Guest

    Answers inline

     
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  18. digitalcrew

    digitalcrew Regular Member

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    Can some one please explain me how will that affect international PayPal users ? the new law is very scary.
     
  19. noph34r

    noph34r Regular Member

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    In USA you should pay taxes for any profit over $600.00 in any year.
    But you can get deductions for your costs.
    This is the sad side of business.
     
  20. Danios

    Danios Registered Member

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    Same question.

    And, did any of you guys thought of opening an offshore tax free account (I think you can do that online) or is that even more dangerous? US but especially EU members.

    I hate my government and administration so I don't have any moral issues with it.
     
    Last edited: Nov 1, 2009