PayPal asking for TAX ID for Stealth Account

KayKay · #1 10-30-2017

My PP stealth account was just Limited and the only thing I can do is receive money on the account. It's fully verified, withdraw limits are lifted. It's a basic personal account. Its a lil over 90 days old. I've sold about $7,200 for the month of October.

They are now asking for Tax ID. What is the best and safest way to get this Tax ID and get my account restored?

Mgkfanboy43 · #2 10-30-2017

Quote:

Originally Posted by KayKay

My PP stealth account was just Limited and the only thing I can do is receive money on the account. It's fully verified, withdraw limits are lifted. It's a basic personal account. Its a lil over 90 days old. I've sold about $7,200 for the month of October.

They are now asking for Tax ID. What is the best and safest way to get this Tax ID and get my account restored?

Register a business llc

Register for a ein using that business name

Upgrade your PayPal to business account

Add the ein to PayPal using the business name

KayKay · #3 10-30-2017

Quote:

Originally Posted by Mgkfanboy43

Register a business llc

Register for a ein using that business name

Upgrade your PayPal to business account

Add the ein to PayPal using the business name

When I start the application, it asks for my social security number. Will PayPal see that? Do I need to register the business under my real name or my stealth paypal name/address?

iceman420 · #4 10-30-2017

Quote:

Originally Posted by KayKay

When I start the application, it asks for my social security number. Will PayPal see that? Do I need to register the business under my real name or my stealth paypal name/address?

dont lie to the IRS or State revenue dept... (i mean that is in terms of personal details not income ahhaha)

paypal will not see your personal details that your register your business from the state. this is what protects you, and why people incorporate or form sub chapter s corps ect

KayKay · #5 10-30-2017

Quote:

Originally Posted by iceman420

dont lie to the IRS or State revenue dept... (i mean that is in terms of personal details not income ahhaha)

paypal will not see your personal details that your register your business from the state. this is what protects you, and why people incorporate or form sub chapter s corps ect

The tutorial says I should have an accessible address linked to my PayPal account....which I dont because its a stealth account. ⊗⊗⊗⊗ name, ⊗⊗⊗⊗ address

iceman420 · #6 10-30-2017

why dont you get a po box or ups address and then make a corresponding paypal account with that info instead?

KayKay · #7 10-30-2017

Quote:

Originally Posted by iceman420

why dont you get a po box or ups address and then make a corresponding paypal account with that info instead?

I purchased this account all the information was already made. I need this LLC done as quick as possible. The Guide says Nevada is best state to use because no income tax. I didnt go over my paypal limits of 200 sales and $20,000 and I dont plan on doing that. I have another account I can use once I get close to those limits so do I need to worry about income tax? I'm guessing no and I can just use my own state. To get everything done using LegalZoom express is bout $700 which will take 7-10 to setup my LLC. If can find something cheaper and get registered quick would be ideal

KayKay · #8 10-30-2017

After forming an LLC, getting a EIN and staying under PP 200 items and $20,000, I wont get hit with taxes AT ALL? I wont to avoid taxes altogether if possible.

Mgkfanboy43 · #9 10-30-2017

Holy **** $700 I think my fee was $75. I didn't know that about meveada, is that true? You still have to file federal taxes .

ebaystealth1974 · #10 10-31-2017

Quote:

Originally Posted by KayKay

I didnt go over my paypal limits of 200 sales and $20,000 and I dont plan on doing that. I have another account I can use once I get close to those limits so do I need to worry about income tax? I'm guessing no and I can just use my own state. To get everything done using LegalZoom express is bout $700 which will take 7-10 to setup my LLC. If can find something cheaper and get registered quick would be ideal

So, you've already sold $7200. You say you're gonna stay below $20,000. That leaves you ~$12,000 left to sell on this account. And you're willing to SPEND $700 on an LLC, to reach those final 12,000 dollars in sales? I hope you have good profit margins lol

If you're gonna get an LLC, why not report your damn income and just keep selling on that account. You don't wanna get caught stiffing that 3-letter agency. TAKE MY WORD FOR IT lol

phaz0rz · #11 10-31-2017

I agree about not stiffing the IRS. Regardless of what your sales numbers look like you should be reporting your income and paying taxes on your profits. Your tax rate would be very low unless you're profiting $37k+ annually.

To give you an idea of what you're legally obligated to pay in taxes on your current sales: (assuming a 10% profit margin) :
$7200 x .1 = $720 (profit)
$720 x .1 = approximately $72 in taxes owed on the federal level

You're taxed at 10% for income up to $9325.
https://taxfoundation.org/2017-tax-brackets/

Legalzoom is a waste of money but that's one way to form your business. It's a lot cheaper - and just about the same difficulty level - for you to get the EIN yourself from IRS.gov and then file articles of organization/incorporation with a state (costs me exactly $110 each time for the whole process)

Good luck, BTW.

KayKay · #12 10-31-2017

Quote:

Originally Posted by ebaystealth1974

So, you've already sold $7200. You say you're gonna stay below $20,000. That leaves you ~$12,000 left to sell on this account. And you're willing to SPEND $700 on an LLC, to reach those final 12,000 dollars in sales? I hope you have good profit margins lol

If you're gonna get an LLC, why not report your damn income and just keep selling on that account. You don't wanna get caught stiffing that 3-letter agency. TAKE MY WORD FOR IT lol

Yes, I sold $7200 in about a lil over 90 days. I have another account to keep selling on. The point is to be able to retrieve the money currently my Limited PayPal and stay under the limit for paypal. If I create an LLC in NC it's only about $300. $500 if I want it expedited. They want a SSN or EIN for tax purposes. If it wasn't worth it I wouldn't consider it. So youre saying even if I stay under $20k, since I would now have an LLC and EIN I would be paying taxes if I make it in NC?? If I make it in Nevada I wouldn't pay taxes??

phaz0rz · #13 10-31-2017

If you're going to form an LLC you're going to be paying taxes. Period. It doesn't matter what state you register your LLC in.

The income wouldn't be reported by PP if you stayed under $20k but all that means is you're obligated to report the income yourself by filling out your own 1099k. It is a very bad idea to form a business and then never report any income even though your bank accounts are continuously receiving money. The IRS can easily pull your banking history.

ebaystealth1974 · #14 10-31-2017

Quote:

Originally Posted by phaz0rz

The IRS can easily pull your banking history.

They can also very easily pull your money FROM the bank. Happened to me lol

ebaystealth1974 · #15 10-31-2017

Quote:

Originally Posted by KayKay

If I make it in Nevada I wouldn't pay taxes??

I keep seeing you mention "no taxes" in Nevada. I think that might just be for state taxes, which are negligible anyway.

Read phazorz posts above to see how little tax you'll actually owe. It's really not worth the trouble of avoiding. You can deduct like crazy when you run a business and pretty much get the numbers where you want them. Hell, I've filed losses before.(you dont want to do this much, though)

But what you DON'T want, is for them to catch you NOT REPORTING the income.

KayKay · #16 10-31-2017

Quote:

Originally Posted by phaz0rz

If you're going to form an LLC you're going to be paying taxes. Period. It doesn't matter what state you register your LLC in.

The income wouldn't be reported by PP if you stayed under $20k but all that means is you're obligated to report the income yourself by filling out your own 1099k. It is a very bad idea to form a business and then never report any income even though your bank accounts are continuously receiving money. The IRS can easily pull your banking history.

Okay, do I start reporting income at the time I create my LLC and turn my PP into a business account? OR do I have to report what I've made for the entire year even before I turned my PayPal into a business account and created the LLC and EIN? Do the IRS need invoices of the goods showing that I paid for the goods I'm selling? That could maybe be a problem if so.

Quote:

Originally Posted by ebaystealth1974

I keep seeing you mention "no taxes" in Nevada. I think that might just be for state taxes, which are negligible anyway.

Read phazorz posts above to see how little tax you'll actually owe. It's really not worth the trouble of avoiding. You can deduct like crazy when you run a business and pretty much get the numbers where you want them. Hell, I've filed losses before.(you dont want to do this much, though)

But what you DON'T want, is for them to catch you NOT REPORTING the income.

The money I'm making isn't gonna be forever maybe a couple more months at most until I'm done selling what I have. Basically, I won't be making enough online in the near future to even deal with taxes and a business that will soon be inactive. I currently have about $1.5k in my PP. My main goal is to get that money out. Is it worth it to create the LLC, get the money out and stop selling altogether on that PayPal for the remainder of the year and just sell on my other paypal? Or close the LLC altogether afterward? The other PP is in my gf name. Also attached is her bank account. If I keep the LLC I only pay taxes on the money I make right? Lets so my business stops in the near future then next year I dont sale anything...I wont pay any taxes on Zero dollars made right? I'm guessing I still have to pay some type of fees each year just for having an LLC

KayKay · #17 10-31-2017

Quote:

Originally Posted by phaz0rz

I agree about not stiffing the IRS. Regardless of what your sales numbers look like you should be reporting your income and paying taxes on your profits. Your tax rate would be very low unless you're profiting $37k+ annually.

To give you an idea of what you're legally obligated to pay in taxes on your current sales: (assuming a 10% profit margin) :
$7200 x .1 = $720 (profit)
$720 x .1 = approximately $72 in taxes owed on the federal level

You're taxed at 10% for income up to $9325.
https://taxfoundation.org/2017-tax-brackets/

Legalzoom is a waste of money but that's one way to form your business. It's a lot cheaper - and just about the same difficulty level - for you to get the EIN yourself from IRS.gov and then file articles of organization/incorporation with a state (costs me exactly $110 each time for the whole process)

Good luck, BTW.

Oh wow ok. This isn't bad at all. I guess I should not use LegalZoom. Now, this is the thing....I don't have any proof of purchase for the items I'm selling. Do the IRS need that?

ebaystealth1974 · #18 10-31-2017

Quote:

Originally Posted by KayKay

Okay, do I start reporting income at the time I create my LLC and turn my PP into a business account? OR do I have to report what I've made for the entire year even before I turned my PayPal into a business account and created the LLC and EIN?

Do the IRS need invoices of the goods showing that I paid for the goods I'm selling? That could maybe be a problem if so.

I wont pay any taxes on Zero dollars made right?

Whole year.

No.

Ever multiplied a dollar amount times zero before? lol

phaz0rz · #19 10-31-2017

Quote:

Originally Posted by KayKay

Oh wow ok. This isn't bad at all. I guess I should not use LegalZoom. Now, this is the thing....I don't have any proof of purchase for the items I'm selling. Do the IRS need that?

The IRS doesn't care one bit about what you sell. Those guys are all about the numbers. You could be selling illegal narcotics through a shell company and the IRS wouldn't care at all, as long as you're honest with them about your profits and you pay your due taxes.

Paying taxes for a single member LLC is easier than you're probably thinking. You pay taxes on your profits once per year (unless you want to pay more often, like those who file quarterly/monthly/daily). A single member LLC doesn't file it's own tax return. The profits from your LLC are passed along to your personal tax return as business income.

If you do create an LLC you would have to report the income from that Paypal account for the entire year. If/when you pass $20k, Paypal automatically creates a 1099k for you with your monthly totals.

If you're selling a limited amount of an item and you don't plan on getting more and making a full-time business out of this, then it probably isn't worth the trouble creating an LLC. You can just shift your sales to a new account. I've been under the assumption you were wanting to make this official and make it full-time.

KayKay · #20 10-31-2017

Quote:

Originally Posted by phaz0rz

The IRS doesn't care one bit about what you sell. Those guys are all about the numbers. You could be selling illegal narcotics through a shell company and the IRS wouldn't care at all, as long as you're honest with them about your profits and you pay your due taxes.

Paying taxes for a single member LLC is easier than you're probably thinking. You pay taxes on your profits once per year (unless you want to pay more often, like those who file quarterly/monthly/daily). A single member LLC doesn't file it's own tax return. The profits from your LLC are passed along to your personal tax return as business income.

If you do create an LLC you would have to report the income from that Paypal account for the entire year. If/when you pass $20k, Paypal automatically creates a 1099k for you with your monthly totals.

If you're selling a limited amount of an item and you don't plan on getting more and making a full-time business out of this, then it probably isn't worth the trouble creating an LLC. You can just shift your sales to a new account. I've been under the assumption you were wanting to make this official and make it full-time.

Okay I think I understand now. Yea this is temporary, but if I could keep the PayPal account that would be nice. I built it up and would rather keep it if possible but maybe not since I have to either provide an SSN or TAX ID. It's limited right now and I just want the money out. Will they lift the limitation at the start of the New Year? If so I might just wait it out. Will PayPal allow me to go to Business (get my money) then back to a personal account then I end the LLC later? If I keep it I would only be selling minor things here and there. I guess taxes wouldn't be too bad. Would I be paying yearly LLC fees(Not tax related) every year?

KayKay · #21 11-03-2017

I just finished creating an LLC and EIN today on the IRS website. I expected to pay something as I completed the application but nothing. Can I enter the EIN in PayPal today and upgrade to a Business Account? Or do I have to wait for anything to process with the IRS?

KayKay · #22 11-03-2017

Quote:

Originally Posted by phaz0rz

The IRS doesn't care one bit about what you sell. Those guys are all about the numbers. You could be selling illegal narcotics through a shell company and the IRS wouldn't care at all, as long as you're honest with them about your profits and you pay your due taxes.

Paying taxes for a single member LLC is easier than you're probably thinking. You pay taxes on your profits once per year (unless you want to pay more often, like those who file quarterly/monthly/daily). A single member LLC doesn't file it's own tax return. The profits from your LLC are passed along to your personal tax return as business income.

If you do create an LLC you would have to report the income from that Paypal account for the entire year. If/when you pass $20k, Paypal automatically creates a 1099k for you with your monthly totals.

If you're selling a limited amount of an item and you don't plan on getting more and making a full-time business out of this, then it probably isn't worth the trouble creating an LLC. You can just shift your sales to a new account. I've been under the assumption you were wanting to make this official and make it full-time.

I created my LLC in with all my real info. When I'm about to upgrade to a PP business account it asks me for my business name, Phone# and address. I used my real info when creating my LLC which the address and phone number is banned from PayPal. What do I do here?