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Re: Paypal taxes in another persons name SSN
 

125K reported to IRS? And you are going to zero that out like no profit was made? Good luck...

If you aint going to report, you should have spread it out over many accounts and never got the 1099. Then at least you got a better chance of being OK. Yes I know, if they audit you, you screwed.

Re: Paypal taxes in another persons name SSN
 

Like I said... shiity accountant!

Re: Paypal taxes in another persons name SSN
 

I have done virtually zero on 500k a year account. People lose and dont make money all the time. Probably why accountant said one time thing as most business wont run on no profit very long.

I'm pretty sure Amazon didn't pay any income taxes. I thought I read this recently

Re: Paypal taxes in another persons name SSN
 

PS. Audit is not as drastic as people make it out to be. Ive been audited and most of it was through mail or phone. Really not a big deal if your accountant signing off on it.

Re: Paypal taxes in another persons name SSN
 

Guys i'm not saying that there will be 0 taxes paid on the 125k its just that my father does not want to pay it under his name and include it in his income since it wasn't his. I'm sure the accountant knows what he's doin as from the research i've done the way he's doing it seems to be correct the 125k will be reported on my taxes. Yes i know how taxes work minus out expenses/fees/deductions etc net income might come down to 30k or less.

Re: Paypal taxes in another persons name SSN
 

Right, but you don't ZERO IT OUT by putting down the amount of sales being the same as cost of goods sold. You use a combination of that and deductions.

His accountant is a moron if he really suggested that to him.

Re: Paypal taxes in another persons name SSN
 

cost of good sold can be just as high or higher than the sales figures if a lot of labor and parts are involved in customising,repairing,refreshing the merchandise,and then freight,tariff,some business do take those expenses into inventory and expense them when sold.
I sell antique watches and servicing them cost me $125,this is added to my inventory cost.
so if I have a watch which I paid $100,now it is $225.
I would say it is worse when you resell automobiles,esp collectible autos.
of course if your COGS is always higher than sales ,then how do you stay in business?

Re: Paypal taxes in another persons name SSN
 

i'm sure he knows what he's doing
here's more info about a similar situation i found

Answer from an CPA
If you are using your friends Paypal account and that income is reported under his social security number, then he will need to include that information on his tax return. Since he is not doing any business, he will be able to report the income and expense it all out to a zero.
You will need to report the income and expenses on your tax return.

Maybe theres different/other ways of doing it correctly thats why i'm leaving it to the account as he's the professional

Re: Paypal taxes in another persons name SSN
 

SOMEONE is paying taxes on the income. Rest assured.

I'm not sure why you're so scared of just doing it the right way.

You are coming up with some of the worst possible scenarios in existence lol

Can you do what those people are suggesting? Sure. Should you? Probably not lol

Re: Paypal taxes in another persons name SSN
 

Since you'll be getting an EIN to use anyway, and you have the OK to do this on your Dad's info this "one time" wouldn't it be a better long term plan that you go start over with all new info since you'll be getting the EIN anyway (the real limiting/empowering factor and work of it all)....?

Starting a new solid account is as easy as anything you're discussing, all you have to do is super-focus on fast and awesome followup on your early sales, and not only will you have all your income and sales separate from your Dad's, but you will always have Pop's account to fall back on in case of an extreme emergency.

I think that every time you have a reason/opportunity (like with the EIN, since you'll be getting one anyway) to start over (actually, start again like a tree growing another root) it's like spreading yourself out more on the ice to give yourself a better chance overall.

The value of building up a new separate account when things like a new IP/phone/EIN are going to happen anyway because of a move, new equipment or whatever it is, in my opinion is often under valued. I say explore starting a new set completely if you're going to get the EIN anyway.

Re: Paypal taxes in another persons name SSN
 

can you elaborate how to zero out the income?

Re: Paypal taxes in another persons name SSN
 

Yes i will be paying taxes on the 125k and will be starting a llc going forward. I will also be opening another account as a backup in a relatives name just to be safe. Im in no way trying to avoid these taxes i was just asking for advise on here which i appreciate receiving

Re: Paypal taxes in another persons name SSN
 

Yes your right i would say 20-30% profit from that but no matter what i say my father doesn't want to include it on his taxes for some reason i believe your right he's intimidated by the amount. Maybe he's afraid of going over a tax bracket not sure but he's adamant that he wants nothing to do with it so he's going with his accountants recommendation

Re: Paypal taxes in another persons name SSN
 

I hear you. So there's nothing you can do about it regardless.

For such a small amount I doubt you'd go out of the 12% bracket unless your dad makes good money on his own. So like $2-3k owed in the worst case scenario.. but probably much less with deductions and stuff. Good luck either way amigo. :thumb:

Re: Paypal taxes in another persons name SSN
 

I appreciate all the help and input from everyone

Re: Paypal taxes in another persons name SSN
 

It's a big deal when your income is not correct or not even being reported lol.

Yeah if you have an accountant doing everything legit, you have nothing to worry about.

Re: Paypal taxes in another persons name SSN
 

Pft.. what are you talking about? lol

Don't you know that everybody here is doing things 100% legitimately and by the books? :rolleyes:

Re: Paypal taxes in another persons name SSN
 

WHY CANT YOU learn your lesson?
opening another account in a relative name?
I am so glad I am not related to you.

Re: Paypal taxes in another persons name SSN
 

which book?
You know the joke,italian business has 2 sets of books,one for the tax agent and one for P/L.
Not just Italians,it is every nationality

Re: Paypal taxes in another persons name SSN
 

His "accountant" told him to list $125k as the cost of goods sold. :lol:

Yeah, that won't look suspicious AT ALL!

Re: Paypal taxes in another persons name SSN
 

Whats wrong with opening a legitimate 2nd account for backup? Would you rather me setup a stealth account and jump though all the hoops?

Re: Paypal taxes in another persons name SSN
 

Im not an accountant are you? Do you have an alternative way to do it without my father taking the burden?