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Paypal taxes in another persons name SSN
 

Hello i have a Paypal/Ebay account in my fathers name that i have built up over the years due to loosing mine years ago. This year i crossed the threshold 20k/200 and will be paying taxes on the income going forward. His accountant explained that my father has to file schedule C zero out the income and i will take over the tax burden. The account is a premier PP account verified with his SSN in good standing. My plan going forward is to start paying taxes on this account however my father is worried because the account is under his name and his SSN and doesn't want it tied to his income. My question is this do i open a LLC in my name and upgrade the account to a business account? Will this be a problem since his SSN is already attached to this account? I just want to continue to use this account and take over the tax liability without going stealth or starting all over fresh.

Re: Paypal taxes in another persons name SSN
 

Yes, your plan is solid enough.

Converting the account to an LLC account with an EIN would be the only way to shift the tax burden from your dad to yourself. Because then at the end of the year PP will issue a 1099 with your EIN printed on it rather than your dad's SSN.

Re: Paypal taxes in another persons name SSN
 

what does your father accountant mean by filing schedule c and zero out his income and you pick up his tax burden?
get a copy of schedule C and understand what he has to go thru,I hope you have good recordkeeping with sales ledger,vendor invoice,ebay fees,paypal fees etc.
Is the Ebay account in his name as well?
if there is a home office and vehicle involve,whose home and vehicle is used in running this business?
with son like you,who needs enemy?

Re: Paypal taxes in another persons name SSN
 

are you sure?

Re: Paypal taxes in another persons name SSN
 

Dam brah, you brutal!

LOL, in all honesty, this should not be a big deal as you seem willing to pay for any tax issues.

Getting it switched to your info would be best, but either way would work.

Re: Paypal taxes in another persons name SSN
 

if Phaz SUGGESTION WORKS,then his father would not have to file schedule C,as he would not get a 1099K .

Re: Paypal taxes in another persons name SSN
 

Paypal never delete any information registered with the account,your father SSN could stay with your LLC account.

Re: Paypal taxes in another persons name SSN
 

Yes, I'm sure.

Once you convert the account to a business account and provide an EIN the EIN would automatically be used on 1099k's even if there's already an SSN on the account. Paypal wouldn't need to send a 1099k for both tax ID's on the account - they would naturally choose the business tax ID since you've told them you're a business.

Re: Paypal taxes in another persons name SSN
 

100% positive.

Re: Paypal taxes in another persons name SSN
 

Welcome to the forum OP - all the best as you master stealth :thumb:

You are in good hands in the thread so far.

Re: Paypal taxes in another persons name SSN
 

Whoops. Looks like I replied from the wrong account! :shhh:

Re: Paypal taxes in another persons name SSN
 

That's sloppy stealthing!

Re: Paypal taxes in another persons name SSN
 

Yes the ebay and paypal are in my fathers name as i lost my account years ago. He was sent a 1099 from paypal this year because i crossed the threshold. His accountant told him in order for him to not have to include it in his income he has to file a schedule C put the income on there then minus it out so it zero's out and then i have to file taxes and claim that income. He told my dad that I i can't keep doing that every year so i'm going to have to start a LLC as i don't want to loose that account since it has high limits/verified/excellent feedback etc. Vehicle wise i'm the one running the ebay business using my vehicle and home

Thanks for all the responses i'm not trying to go stealth just want to make sure my father doesn't get in trouble with the irs and pay my taxes my going forward

Re: Paypal taxes in another persons name SSN
 

just curious,how does he zero out his schedule C income?
if he has enough expenses to offset the income,then he would have zero income.
or is he going to claim he is doing it for you,so he would transfer the sales to you,I dont recall any way you can do so on a schedule C?

Re: Paypal taxes in another persons name SSN
 

I was wondering the same thing. Cancelling out all the income on a schedule C seems like a good way to be audited.

If I were stuck in this situation I'd ask my dad to include all the business income and expenses on his 2018 tax return (little late for that, lol), report the profits honestly, then give him however much $ he has to pay for your business activity.

Re: Paypal taxes in another persons name SSN
 

Phaz0rz nailed it right here ^^^! That's the only option for a decent person to make it right.

Oh, and your dad has a shiity accountant!

Re: Paypal taxes in another persons name SSN
 

Thing is my father doesn't not want to include it on his income since he wasn't the one making the sales and was 125k reported from PP. He's adamant that he doesn't want me using his account if this is going to happen every year and the accountant said he cant do this every year just a 1 time thing so i'm trying to go legit so that he doesn't have to worry about it. Maybe the zeroing out thing i'm misunderstanding but all i know is that the accountant is putting it on his schedule c so it doesn't effect his income. He has his own business and a regular full time job as well if that help's clarify

Here is some info i found on the internet from similar situations:

You will enter the amount of the 1099K as the income. In the Cost of Goods Sold category, you can put the SAME NUMBER so that it zeroes out the Schedule C.


You reported $1m in income and an equal $1m in loss for a net income of $0 (or minimal) for this venture?
Seems like it. The money is OPs as it's his Paypal account, and this is a way to shift the income to the father.
Because he's paying that 1M in income directly to his father. Ops name is on the account but his father is doing all the selling. Therefore, all income is expensed to the father. 0 net income on that venture.

Re: Paypal taxes in another persons name SSN
 

Yeeaaahhhh, NO! IRS would be eating Sunday dinner with you guys. :lol:

Phaz0rz gave you the only viable solution for this, going forward. LLC and EIN, to shift the tax burden onto yourself.

This year, you'll do the Schedule C part of your dad's income that YOU put on him, and pay him what he owes because of you.

Re: Paypal taxes in another persons name SSN
 

Yeah i'm going to start a LLC for sure. I just wanted to make sure PP will use the EIN instead of his SSN which was already answered. Thanks guys for all your help i appreciate it as far as the schedule C thing ill have to talk to his accountant which i'm using as mine anyways. I filed for an extension and prepaid some taxes already so i can have time figure this all out

Re: Paypal taxes in another persons name SSN
 

Well, if you want the IRS to believe that you had EXACTLY zero profit on 125,000 in sales, you go right on ahead! lol

Re: Paypal taxes in another persons name SSN
 

everyone knows selling on internet ,the margin is slim.even IRS agents know as they also sell on internet or someone in his family does.
It sounds like OP's father has his own business,but he is not reporting his business on schedule C,so the schedule C would just be his Paypal 1099k sales minus expenses.
Expenese could add up,besides cost of good sold,there are mileage deduction of use of the car,phone if there is more than one,office deduction,any home improvement will be prorated ,property tax,supplies,postage,freight in,pc,camera,ISP.Norton security ,misc software/hardware,even the house utilities would be prorated. .
he could end up with a small profit,not zero profit.
but if he ever get audited,it would just be more to audit,I am glad OP is not my son.
one thing his father can do,is to issue 1099 to OP as a contract worker,and pay him whatver the profit is,that will zero out his profit on Schedule C for sure/
say if after all the expenses,his father make 15,000 on schedule C,well then add contract worker and pay his son 15,000,then the bottom line is now zero.

Re: Paypal taxes in another persons name SSN
 

On another forum,.some one suggested using grandparents SSN to open a Paypal account!
Since grandpa and grandma do not need and use Paypal.
how would grandma and grandpa like when they get audited for their home business?

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.