Confused? $20k or 200 items sold.

[business101]

hi guys,

Wanted to ask about the $20k and 200 items rule.

if i sell over 200 items and stay under $20k will i still get the paypal tax.

if i do 1000 sales a year and stay under $20k am i still good or not?

thank

[empirestate]

Originally Posted by business101

hi guys,

Wanted to ask about the $20k and 200 items rule.

if i sell over 200 items and stay under $20k will i still get the paypal tax.

if i do 1000 sales a year and stay under $20k am i still good or not?

thank

Yes as far as tax document goes, PP will not generate one but they might ask for documentations or tax ids.

[business101]

can anyone else who went through this recently

please let me know.

thank you guys

[dallis]

In the US it is BOTH 200 sales AND 20K.

[slokor]

I dont believe this is entirely accurate.
If you only pass the $20k mark youll still get hit by the request since its the IRS threshold for reporting income. If Im not mistaken the 200 item is the less important one and if you pass that one along you wont be hit by the request for an EIN.
If I am mistaken I would appreciate someone more knowledgeable correcting me.

[ecommaster]

Originally Posted by dallis

In the US it is BOTH 200 sales AND 20K.

200 OR 20K

I just got a message from one of my accounts which is below 20K but over 200 sales. Also, If PP projects more than 200/20K no matter whats your number right now, they will ask you SSN or EIN as well.

[dallis]

Warning: offsite link to PP information page:

https://www.paypal.com/us/webapps/mpp/irs6050w

I copied the excerpt below, it is 20K AND 200 transactions.

PayPal is required to report gross payments received for sellers who receive over $20,000 in gross payment volume AND over 200 separate payments in a calendar year

As said above, they will ask if the PROJECT your total to be above either.

[SaiJin]

And there's also a chance that you'll get the EIN request even before then, and based on experience it's the rate of frequency of money coming in in a short time.

Have you actually read the eBay Stealth yet? It will help you a great deal.

This forum is built to give support to people who has it with further questions.

[james13v]

Originally Posted by slokor

I dont believe this is entirely accurate.
If you only pass the $20k mark youll still get hit by the request since its the IRS threshold for reporting income. If Im not mistaken the 200 item is the less important one and if you pass that one along you wont be hit by the request for an EIN.
If I am mistaken I would appreciate someone more knowledgeable correcting me.

To add to what other people have mentioned, think of it this way. If you sold your car for $20k, ONE time, do you think paypal would report you for something like that? That's the key tho. Why it's $20k AND 200. Because you can sell just a couple of your own personal possessions and get above $20k, but that doesn't make you a seller. So having $20k, and many sales, means you're a seller, so you get reported. Both factors are equally important. They play off one another. Selling 200 pennies for $1 each probably doesn't get pinged by the IRS either.

[danshan]

are you asking about actually reporting or getting hit for EIN or SSN? two completely different things

[danshan]

reporting they are required to report period when you exceed. for EIN or SSN request they base it on a zillion factors but mainly when it looks like you will exceed (projecting) or have exceeded either.

[GhostOfAmazon]

Originally Posted by slokor

I dont believe this is entirely accurate.
If you only pass the $20k mark youll still get hit by the request since its the IRS threshold for reporting income.

lol wut?

$600 is the threshold for reporting income....lol

https://www.irs.gov/uac/reporting-miscellaneous-income

[dallis]

Yeah, it's not the "IRS threshold for reporting income", it's the threshold for receiving a 1099K.

[user3657]

Once you get a request, do they still reset you at the beginning of next year?

[dallis]

The time period is a calendar year so the clock resets in January.