Upgrading to business account?

newjerseymax · #23 08-08-2011

Quote:

Originally Posted by KingRay

There is 2 ways to get "around" it. One is to split up your sales on multiple stealth accounts.

The other is to apply for the EIN with the IRS. You need to start paying taxes anyway. There is much more to this so if you plan on just using it to pacify paypal then you might be in for more of a mess that you know.

Either way you need to file taxes on all your sales.

To the poster that made 5k per month and didnt pay a dime. Good luck in the future and hope you have some records becuase if they ever do they can go back 7yrs.

Plus the IRS has many more options when it comes to finding hidden income. using someone elses name and info is just ID fraud. many of you feel that since you arent using someone elses SSN you are fine. WRONG..

One of you said that they probably cant find you. I know of someone personally that had all stealth and the IRS found it all. He now is broke and has 100k in back taxes and penalties to deal with. They went back 5 yrs and ebay gave them all records because all the IRS has to do is get a court order.

If you didn't pay taxes on 100k then I would be worried too. However not paying taxes on 5k or so for the year wont get you much in a bind. Yes morally you should pay taxes on that 5k, but then where are those taxes going? A whole other discussion....lol

KingRay · #24 08-08-2011

The poster said 5k per month. The person that I am talking about just didnt file for 2 years at 20k per year. It was over 5 year late and the IRS counted all sales as profit since he had no records. That plus penalties went to over 100k.

He messed up bad.

You are right its just morally wrong to do so at smaller amounts. The only way to get really caught into a lot of trouble is if you get caught up in some kind of lawsuit with a VERO rep and court orders get tossed around. then you are hosed because ebay gives them what they ask for. They have to.

sickofbaypowertrip · #25 08-08-2011

If I supply my legit business EIN to pp, and the addresses don't match, nor the name, because one is legit and one stealth, will this raise a red flag to pp/ba?

KingRay · #26 08-11-2011

Quote:

Originally Posted by sickofbaypowertrip

If I supply my legit business EIN to pp, and the addresses don't match, nor the name, because one is legit and one stealth, will this raise a red flag to pp/ba?

Your business name has to match the name you gave the IRS as a business name. the start date of the business you gave the IRS also has to be the same one you put in paypal when upgrading to a business account.

The personal name means nothing. To paypal when using the EIN your name is the business name now. same with the IRS. You are no longer joe blow. you are now JB industries or something like that.

SweetPea · #27 08-11-2011

Quote:

Originally Posted by KingRay

The poster said 5k per month. The person that I am talking about just didnt file for 2 years at 20k per year. It was over 5 year late and the IRS counted all sales as profit since he had no records. That plus penalties went to over 100k.

He messed up bad.

You are right its just morally wrong to do so at smaller amounts. The only way to get really caught into a lot of trouble is if you get caught up in some kind of lawsuit with a VERO rep and court orders get tossed around. then you are hosed because ebay gives them what they ask for. They have to.

Is there a way for IRS to find you and see your Ebay profits if you are operating under a variation of your name using a real bank account? It would be tax evasion if you are caught, right?

sickofbaypowertrip · #28 08-11-2011

Quote:

Originally Posted by KingRay

Your business name has to match the name you gave the IRS as a business name. the start date of the business you gave the IRS also has to be the same one you put in paypal when upgrading to a business account.

The personal name means nothing. To paypal when using the EIN your name is the business name now. same with the IRS. You are no longer joe blow. you are now JB industries or something like that.

But if you have more than 1 business with that ein and multiple addresses, then how would that be handled?

KingRay · #29 08-11-2011

I have multiple EIN's and separate each one as a different business. I have 7 of them. 3 for ebay/paypal accounts and the others for local partnerships with family,etc (Brick and mortar businesses).

The address on the EIN means nothing. Just where to send the EIN paperwork which you get in about a week or so. Businesses change locations all the time. That would be impossible to match up for everything when it comes to business stuff. The SSN is what is most important for the IRS.

KingRay · #30 08-11-2011

Quote:

Originally Posted by SweetPea

Is there a way for IRS to find you and see your Ebay profits if you are operating under a variation of your name using a real bank account? It would be tax evasion if you are caught, right?

If you get suspected for tax evasion they just get court orders on all your bank accounts and anything else associated with your SSN or name. Then by seeing what was deposited here and there and uploaded to this and that account they will see ebay on there. This is why people on here try to warn people all the time about keeping good records of product, sales, profit, assets, deductions, interest earned, sales tax paid, etc.

SweetPea · #31 08-11-2011

I hear you! It is some serious trouble...there are a lot of people operating this way, without IRS knowing. I'm going to pay my taxes!

sickofbaypowertrip · #32 08-15-2011

Apparently now the IRS will only allow you to get one if you are a sole proprietor because you can only use one to file your taxes, no matter how many separate businesses you have. :(

Shadowmoe7 · #33 08-15-2011

does having a buniness paypal account mean that i can have more money coming in without limitation ?

KingRay · #34 08-15-2011

Quote:

Originally Posted by sickofbaypowertrip

Apparently now the IRS will only allow you to get one if you are a sole proprietor because you can only use one to file your taxes, no matter how many separate businesses you have. :(

Not sure where you heard that. I have gotten another one recently. I have ALL mine with my ssn and file separately on all of them. 3 of them are sole Proprietorships.

some dude · #35 08-16-2011

Quote:

Originally Posted by Shadowmoe7

does having a buniness paypal account mean that i can have more money coming in without limitation ?

I would assume the answer is yes, but it depends on the nature of your business. If you are 100% legit, the answer is almost certainly yes. If not, you are probably more likely to get noticed.

Personally, I've been selling ~50K+/mo on eBay / Paypal. The account I'm selling on is a brand new business account, only started 6 months ago, and pretty quickly after starting, the Paypal account got Limited. They asked for receipts, I provided them, and they removed the limits a day later. Since then, the Paypal rep who originally called and limited my account has been assigned to my account, and we've spoken around once per month. They have generally been really cool with us, and no real problems to speak of.

KingRay · #36 08-16-2011

Wow, ebay let you sell 50k in your very 1st month. Good for you.

newjerseymax · #37 08-16-2011

Quote:

Originally Posted by sickofbaypowertrip

Apparently now the IRS will only allow you to get one if you are a sole proprietor because you can only use one to file your taxes, no matter how many separate businesses you have. :(

This is not true.... Once again goes to show that any advice gives you an avenue of research, however I wouldn't take it all at face value.

some dude · #38 08-16-2011

Quote:

Originally Posted by KingRay

Wow, ebay let you sell 50k in your very 1st month. Good for you.

eBay actually had limits for the first 2 months, but raised it after 30 days and removed it after 60 days.

sickofbaypowertrip · #39 08-16-2011

Quote:

Originally Posted by KingRay

Not sure where you heard that. I have gotten another one recently. I have ALL mine with my ssn and file separately on all of them. 3 of them are sole Proprietorships.

Thanks! So I can get another EIN # use the actual address where it is & then use my stealth address on the mailing address? Do you think PP can see the actual SS# of the responsible party or just the business name & address?

I would like to stick with PP since it seems to be the most cost effective, especially if I go with a business account, and if I get limited then go with one of the other companies.

Thanks again for all the advice!!!!

SweetPea · #40 08-16-2011

IRS will assign you one number. If you do get more, you will pay taxes on the amount from all the EINs. PP CAN'T get your ss# or name from IRS. Would be a felony.

KingRay · #41 08-16-2011

Correct, you will be paying taxes and reporting income, assets, deductions on each one with your ssn. Dont get more than one or even one of them for actually unles you know everything there is to know about what is involved. you will be held as a business from that time on. its no joke so you need to get your stuff straight. If you were flying along making money you need to realize your profits are going to be lower due to the quarterly tax payments you will be making

SweetPea · #42 08-16-2011

Quote:

Originally Posted by KingRay

Correct, you will be paying taxes and reporting income, assets, deductions on each one with your ssn. Dont get more than one or even one of them for actually unles you know everything there is to know about what is involved. you will be held as a business from that time on. its no joke so you need to get your stuff straight. If you were flying along making money you need to realize your profits are going to be lower due to the quarterly tax payments you will be making

I think there will be a lot of trouble with the IRS and online banking reporting laws this year. People seem to be throwing around the topic of EIN numbers of a way to outsmart Ebay and Paypal. They do not realize the depth of what they are doing. IRS is going to go after all these people and I bet there will be a lot of tax evasion and ID theft. I understand what you have been saying, but unfortunately, I don't think everyone is listening. I have a feeling that people believe you have multiple EIN numbers they can have that many accounts. Each one will stay under $20,000 therefore, none will be reported. Hmmm...not a good situation

KingRay · #43 08-16-2011

It will catch up with each and every one of them. Like I said in another post I have a good reason to beleive that this 20k thing is a test to see what will and wont work for the IRS. I would not doubt that gets dropped to 5k soon thereafter.

To get and fly with multiple EIN's you have to do a lot of work. I have contacted business attorneys, tax consultants, etc on what all is involved with mine and I can tell you now that these people have no idea what is headed their way.

Anyone that sells thousands of dollars on ebay on the 1st year of their EIN probably has something to even worry about. The IRS knows that most business models take years to make a profit. Showing huge profit from day one will only make you look like you have had the business for a while but are just now starting to file. You have to know what you are doing on these and its not as easy as many are thinking.

Yeah its easy to get one and post to paypal but that is the easy part of it. The legal and hard part is the IRS.

SweetPea · #44 08-17-2011

You are right with starting a business and making a huge profit. That is a definite way of triggering an audit. IRS gives people 3 years worth of "write offs" with a loss. After that, you definitely have some explaining to do if you keep going and use huge deductions to avoid taxes. Since I have joined the forums, I have been really surprised at the amount of people who don't know what they are doing.