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Get ready for new fee structure...
 

Im guessing with all the new software, paperwork, personel, and extra work involved with the new 1099 reporting rules, the fee's that Amazon, and paypal charge will be going up very soon.

Anybody get asked for SS info yet? Im guessing probably the notices will go out next week. Probably gonna be alot of scammers trying to get your info this year.

Be very careful who you give your info to!

Good points.

NEVER email your SSN or EIN to anyone.

NEVER click on an email link to enter your SSN or EIN - EVER!

If eBay/PayPal/Amazon need your SSN/EIN, they will send you an email request. Open your browser yourself and go to their site as you normally would. I'm sure there will be a link in your seller account that you can follow to enter the information.

The scam artists will be out in force trying to get information. Even from people who are not going to be anywhere NEAR the reporting thresholds. I'm sure the scammers will have LOTS of VICTIMS. Don't be one!

im guessing how much more the fees could be? $0.50 more? hmm interesting topic.

SSNs to open up Amazon account pretty much means end game doesn't it?

They wouldn't do that it wouldn't be a smart business choice and unnecessary since at least 70% of the sellers don't meet the threshold. They would lose a lot of potential sellers and its just unnecessary. I can almost guarantee this new law won't have much effect on any of us and you should be reporting anyways.

As a key rule you should be reporting your income as a whole, this means all accts from where ever combine! You need to pay your taxes! but by spreading out your sales below the threshold on each one should avoid the need for SS#

from last i read here on the forums is that if you are trending to 20K for paypal they will send you a notice. $1,666.66 x 12 - stay below this. This will be for all payment processors


From Paypal's blog regarding the new bill and law: https://www.thepaypalblog.com/2008/0...ts-become-law/

Under the legislation, PayPal will be required to report to the IRS the total payment volume received by PayPal customers in the U.S. who:

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

This legislation applies to all payment providers including PayPal and takes effect in 2011, so the first reports will go to the IRS in January 2012. Our goal when the legislation takes effect is to make it easy for PayPal merchants who fall under the provision to report their taxable incomes.

In response to some of the questions below about business expenses (such as shipping, insurance, etc.), it is very important to point out that the figure PayPal will report to the IRS is only the total payment volume received by your business. Because of business expenses and other reasons, this figure may not match the yearly revenue or income figures that you report to the IRS in your tax forms. We encourage all of you to consult with your tax advisor when this law takes effect to ensure that you are complying with federal tax laws.


Some recent comments from this blog on this topic:

your not getting taxed on the 20k you make as if it was income, you run a busniness and have expenses and cost of product if your net is only 5k then thats all you get taxed on
December 11, 2010 at 11:49 am


You can still deduct shipping, and other expenses as others have said. The new form, I believe is called a 1099-k for merchant and third party services, you will find a place on your schedule C starting with the 2011 reporting year to input the figures reported on this document. From there just move forward and make your deductions as you normally would. I hope this helps.

you can also deduct internet, phone, anything that you can possibly relate to business. Easiest way is just under "other income" record your net profit.

Yes but I would advise being careful about deducting every little possible thing thats the quickest way to get audited.

I would consider consulting a tax advisor based on the entity you choose. Sole P, C-corp, S corp etc., If professionally itemized and reported then this lesson your chance and some also provide audit protection meaning they will give you support if it happens.

According to NPR, unless you are making a lot of money (I Believe it was 200k), your chances of being audited are very very low. However, if you do get audited and are not prepared or did some shady things, then good luck because it is not a fun process.

Trust me, you do NOT want to be audited. I was, and it is NOT a fun process. Luckily, the auditor I was dealing with was very nice and gave me time and even some leeway to prove expenses. But you have to pull all kinds of receipts and records and be VERY thorough.

And if the auditor finds something that leads them to believe you are dishonest, then GOD HELP YOU! Not only will they be looking at one year, they can go back for up to SIX YEARS. That means you must produce more records.

I report honestly, as it is not worth it to me to try to cheat and save a few bucks. The consequences are not worth it.

If they just find that you made an honest mistake (like you paid $6k in taxes, but you owe another $50) then you just pay the balance, no big deal.

But, if they find that you underpaid by $6k, you can count on that immediately becoming $9k with fines and penalties. Then, they assess interest. And if you cannot pay immediately, there is even MORE interest. AND you may be subject to backup withholding.

AND, if they feel you purposely LIED and underreported your income, then they can file a criminal case against you for tax evasion. Then you have to pay lawyers to defend you and if you LOSE then you go to JAIL.

It just isn't worth it.

And do NOT take this as tax advice. The only tax advice I am qualified to give is that you report honestly and pay your taxes.

if you dont mind my asking, but what was it that triggered an audit? Random, or did someone rat you out?