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Old 02-02-2017
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Question Taxes On Account With EIN

I've read a bunch of threads on the subject regarding EIN's and tax information, and thanks to this forum, I have learned a lot.

So, with that being said, I still have a question that's unanswered because I did not find a clear solution.

Let me paint the picture:

  • Account got request to add EIN/Tax info
  • I added the EIN
  • Paid taxes on money made that year. Sales were no more than $8k.
  • Did not sell on this account for 2 years. Zero dollars went through the account in 2 years
  • Came back to the account near the end of 2016
  • Did $2k in sales

Here's where I'm confused: All the profits made from sales were spent on the Paypal account purchasing stuff. And some of the goods sold on eBay were at a loss so not a lot of it was profit so to speak. So not much, if any, was transferred to the bank.

Anyway, does Paypal 100% report all funds that went through the account to the IRS because I have an EIN? Or is it only when you reach over $20k in sales and 200 items sold? Because I'm not even close to that.

What I mean is, can I take it easy and just file it as added income and not worry about all the fine details that an EIN entails? I simply want to add the money made from the sales as additional income.

Again, I've read multiple threads on this subject and understand that aspkin doesn't contain tax professionals, I should seek an accountant, always pay your taxes, etc. which I do.

I'm just looking to an answer to the question that I bolded above. Because as well know, Paypal for sure reports to the IRS everything when you do over $20k in sales and 200 items sold. But in my case, I didn't ever come close to that, although I do have an EIN attached.

Thank you.
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Old 02-02-2017
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Default Re: Taxes On Account With EIN

They'll report 200/20k, and or require you to add more information to account if they feel as though you're going to surpass that amount within the year.
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Old 02-02-2017
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Default Re: Taxes On Account With EIN

BL - Totally irrelevant :(

stubsking - They only send a 1099 for you if you pass 200 transactions AND $20,000 in payments in a given year, so your $2000 in sales will not be reported unless you do it yourself.
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Old 02-02-2017
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Default Re: Taxes On Account With EIN

Great, thank you all for the information! This helps me a lot and will make filing so much smoother!
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Old 02-03-2017
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Default Re: Taxes On Account With EIN

just to also be clear about a common misconception of the 1099-K, it is NOT an accurate judge of gross income. It is just CREDIT CARD transactions. It does not include paypal balances, bank balances, paypal credit payments, echecks, or REFUNDS. It is just the gross amount of credit card processing you received. Not a place on any IRS form for it either.

Using your bank account gross receivables and what is spent out of paypal is far more accurate.
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