IS an LLC necessary?

[Lucynda]

Do I have to have an LLC after going over 20k on PayPal or will the EIN be sufficient. I have an LLC on my Amazon account that has a different business name than the one I put on my EIN and is different than my paypal business name. Could I just change the business name and use that?

[nickopedia]

In simplistic terms, think of an LLC or Corporation as an entity. It's like an actual person.

People are usuaully assigned SSN's for the purpose of a Tax ID.
Corporations & LLC's are usually assigned EIN's for the purpose of a Tax ID.

Some people can't use their SSN, or it's impratical to. Some examples:

1) You reside outside the USA and don't have an SSN.
2) You have already used your SSN on another PayPal account.
3) You are concerned about your privacy and prefer not to give out your SSN for tax purposes.
4) You need to expand the number of accounts used and need more than one Tax ID/EIN.

The EIN is a bonafide TIN, so you are all ready to exceed the 200+20k threshhold; you will be issued work 1099-K by the merchant processor (e.g. PayPal) if you exceed 200 sales AND $20,000 per annum.

To be clear, the EIN is assigned to the business and needs to be in the business name. If it doesn't match records of the IRS, PayPal may kick it back and ask for documents.

[Lucynda]

So I DO need an LLC and an EIN. I have EINs on all of my accounts but have been putting off the LLC because I actually have to pay for that and money is tight.

[Xaviery]

You don't need anything. You say that you are residing in the US but not a US citizen. As a result, they don't proceed to ask for your SSN

For the sale, you can tell them that you do it as a hobby, not an actual business. They'll waive it but I'm not sure how long. All of my information is REAL! However, I don't recommend it if you are serious with your account.

I started selling on eBay more than 1 year ago with nearly 2500+ orders and received more than $110k through Paypal. Unfortunately, I used a wrong card for online payment which I reported lost/stolen before that and they suspended my account :/ . This is the most ridiculous, silly thing ever happened to me after the suspension of Amazon for having 2 accounts with no sales.

[rsot]

Originally Posted by Xaviery

You don't need anything. You say that you are residing in the US but not a US citizen. As a result, they don't proceed to ask for your SSN

For the sale, you can tell them that you do it as a hobby, not an actual business. They'll waive it but I'm not sure how long. All of my information is REAL! However, I don't recommend it if you are serious with your account.

I started selling on eBay more than 1 year ago with nearly 2500+ orders and received more than $110k through Paypal. Unfortunately, I used a wrong card for online payment which I reported lost/stolen before that and they suspended my account :/ . This is the most ridiculous, silly thing ever happened to me after the suspension of Amazon for having 2 accounts with no sales.

Welcome to the forum - all the best as you master stealth

Looking forward to your exeprience - hope you got all your money out? After limitation periods were up

[nickopedia]

It doesn't matter if you are a USA citizen, or don't reside in the USA or not.

If this is a USA PayPal account we are talking about, they will need an SSN/EIN on file if you want to continue selling past 20k/200 limit. Usually you will get the limit long before that, at least if they estimate you may hit that threshold.

A working PayPal with an TIN is going to be a lot easier to work with in the long run unless you plan on making lots of sealths to spread around your sales on. That's what many experienced people do here in the forum, or have their own LLC's setup.

[Lucynda]

The account is on an EIN. I am well past the 20k threshold on the account. Do I need to set up an LLC in addition to the EIN or can I just continue with the EIN.

[nickopedia]

To comply with IRS reporting requirements, PayPal just cares there is a valid Tax ID (SSN/EIN) on the account. Their system may at some point want to cross reference this with the name of the person or business, in which case they will request docs when that time comes.

[Lucynda]

Ok, so iI should probably get one just in case.