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200 items and 20k limit
 

With their new system, if I get a new EIN and upload it on PayPal, will they warm me before reaching the 200/20k sales or they will just report me to IRS?:brushteeth::brushteeth::brushteeth::brushteet h:

Re: 200 items and 20k limit
 

it will send 1099 if you reach 200 transactions AND $20K,one goes to IRS and another copy comes to you.
There is no warning,it is not a firedrill

Re: 200 items and 20k limit
 

Sure... but till now they were asking for SSN if you were over-passing or even approaching your limits

Re: 200 items and 20k limit
 

If you upload the EIN before they notify you then theres no reason to notify you and youll get a 1099 at the end of the year.

Re: 200 items and 20k limit
 

If I use multiple EIN on multiple accounts, do they all count to the total?

Re: 200 items and 20k limit
 

why dont you go to IRS.com and find out

Re: 200 items and 20k limit
 

Any tip to stay under the radar of those 200 sales/20k limit? i know friends and family payment does not count....

Re: 200 items and 20k limit
 

they would tell u to open more stealth accounts and spread your selling among them so you would not reach the limit,but you would need more eins

Re: 200 items and 20k limit
 

If you open multiple accounts linked to one EIN all of them will count towards the 200 transactions and $20K for that particular EIN.

If you, say, have a personal account and business account under your SSN, any sales transactions from those two accounts will count towards the thresholds for your SSN.

You'd have to be super nerdy detail oriented on the bookkeeping and maintain an accounting record of ALL your sales transactions per account. It can be on a spreadsheet or an Invoicing program that has a feature that counts how many transactions and how much in dollar amount, margins between gross and net, etc, you made.

Re: 200 items and 20k limit
 

if you sell $20k and 190 transactions on Ebay,and sell $10k and 200 transactions on AMZN,you dont get 1099 from either.
now if you sell on ebay,amzn ,etsy,ioffer,spotify and keep each under $20k and 200 transactions,you would not get any 1099.

Re: 200 items and 20k limit
 

Youre asking some questions that are better suited for a professional accountant. Contact one and go over your questions to get the right answers.

Re: 200 items and 20k limit
 

I only do direct payments, sometimes I ask clients to send money for F&F.

Re: 200 items and 20k limit
 

if Paypal caught you accepting friend and family payments for goods you sold,it will warn you or shut down your account.it is fee avoidance

Re: 200 items and 20k limit
 

if you ever get an IRS audit or state sales tax audit,they will review 4 years worth of your bank statements,any incoming payments which is not SS,salary,insurance,inheritance ,they want to know more as it is earnings

Re: 200 items and 20k limit
 

You mean if I will do on my SSNed PayPal 300 items and 30 000 in sales in 1 year... ( I am a student) , most likely nothing will happen ? like no knock knock on the door from Police or IRS?

Re: 200 items and 20k limit
 

IRS audit or STate SALES TAX audit have nothing to do with how much you have collected.
of course that 1099k sent to IRS will tell them you have been selling .
State just want to know if you are collecting sales tax for them and remitting to them and if you have bought something from others and they did not collect sales tax from you,you may have to pay USE tax.
IRS audit -they will usually tell you what area of your return they will audit,sometimes they want to audit everything,some times just your small business or personal deductions.

Re: 200 items and 20k limit
 

if you do 300 transactions AND $30k,PAYPAL will send copies of 1099 to you and IRS.
Whether IRS will audit you or not,no one knows.
but you should report it,there is a form for small business you can download with explanations and plug some numbers in to see how it goes.just remember the 1099 total PAYPAL reports is the gross,you need to take out the sales tax you have collected,refunds and returns to come up with the net sales.
plenty of deduction to offset that net sales,like cost of goods sold,freight in and freight out ,mileage deduction for use of your car,if you have more than one phone,second one is deductible,ebay fees,paypal fees,shipig suplies,computers you use,software you subscribed etc etc,if yu haev a home office,thats deductible too

Re: 200 items and 20k limit
 

if you are self employed,you can also deduct your healthcare premium.
by the time you are done with deductions,you may find you make nothing or lose money

Re: 200 items and 20k limit
 

Do I need to keep recipes for each of them? can i ⊗⊗⊗⊗ them? or get an invoice from a seller who sell for 700$, even if i bought the item from China for 500$?

Re: 200 items and 20k limit
 

if you are audited by IRS agent,he would usually tell you which part of your return he is targeting .
if he is looking into your small business,yes,he could ask for vendor invoice,sales ledger,bank statements for last 2 years/I think it is 2 years,not 4 years.
you can make up vendor invoices,but he could also look into your cc statement or bank statement to see how much you actually pay?
say your vendor invoices said you bought 5k worth of goods,but your bank statements and cc statements come short of 5k,ofc ourse you can say you pay cash,but where does cash come from,it would have to be from your bank account or ??
IRS resources are limited,they usually go after folks who report higher income,aint worth the time and efforts to chase the small sellers

Re: 200 items and 20k limit
 

state audit is different,in my state,they audit retailers for last 4 years of sales asking to see sales ledger,vendor invoices,bank statements etc
They are looking for orders you sold to customers in your state and if you did not collect sales tax,they expect you to pay.
There is also use tax,you should talk to your accountant,he will explain it better .

Re: 200 items and 20k limit
 

IF HE really wants to nickpick,he could take your invoice which said $700 and ask you for the payment receipt which show you pay this vendor XYZ $700,not $500,you can either show him a cancelled check,credit card receipt or cc/bank statement which contains this $700 amount.