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Old 12-15-2015
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Default IRS TAX. Reporting and filing.

I was talking to my certified public accountant today and he was telling me that sales over $600 have to be reported to the irs and a return must be filed. Whether it be an ein or a ssn, sales over $600 must be reported and filed with its. Can anyone else verify? I feel like my accountant is trying to make money out of me. I understand that the 200 & $20,000 threshold is a must to report but sales over $600? Seems a bit strange. If anyone is able to chip in, it is greatly appreciated. Thank you.
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Default Re: IRS TAX. Reporting and filing.

I found this article that explains a little bit more. Must You Send 1099 Forms to Contractors Paid Via PayPal or Credit Card?

So a 1099-misc is required to be filed with sales over $600?
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Old 12-15-2015
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Default Re: IRS TAX. Reporting and filing.

Yep. He is not fibbing.

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Old 12-15-2015
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Default Re: IRS TAX. Reporting and filing.

Been that way as far back as I have been filing taxes.
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Default Re: IRS TAX. Reporting and filing.

you are not understanding what the 1099-K is.

There is no use for you or your accountant for the 1099-k No place exists on your returns for it. It is a report of income of credit card processing to the IRS.

Long story short, 100% OF INCOME must be reported by law to the IRS. Your 1099-k is meaningless to you because it is nothing but a gross number of $$$ for credit card processing. Your actual gross income is going to be higher. W2, Cash sales, tips, dividends, paypal balance payments, paypal smart connect, paypal gifs, amazon distributions that are not credit card payments, rental income, off street labor, and on and on and on will not be on a 1099-k

So law states, all income over $600.00 must be reported. It has zero to do with your 1099-k also, just because you might sell, $1,000,000.00 does not mean your income is that. Your costs of goods, rent, services, fees, etc...all get deducted. It is quite possible to still loose money with a gross income like that and get a return.
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Default Re: IRS TAX. Reporting and filing.

So PayPal reports to IRS after you pass $600 in sales or does the bank?
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Default Re: IRS TAX. Reporting and filing.

Quote:
Originally Posted by nyc View Post
So PayPal reports to IRS after you pass $600 in sales or does the bank?
Paypal follows the IRS 1099-k credit card processing laws of 200 transactions and 20K in sales. Both must be met.
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Default Re: IRS TAX. Reporting and filing.

Your CPA is accurate where YOU are required by law to report all income over $600.00

the 1099-k is the law for credit card processors to report your income to the IRS. Basically, the IRS wants to keep you more honest and needs something to compare.

So if your 1099-k says $150,000.00 gross income and your returns show a gross income of $50,000.00 they know you are cheating or invading taxes even.
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Default Re: IRS TAX. Reporting and filing.

Quote:
Originally Posted by yankee View Post
Your CPA is accurate where YOU are required by law to report all income over $600.00

the 1099-k is the law for credit card processors to report your income to the IRS. Basically, the IRS wants to keep you more honest and needs something to compare.

So if your 1099-k says $150,000.00 gross income and your returns show a gross income of $50,000.00 they know you are cheating or invading taxes even.
And I assume they might go after someone dodging taxes on 150k gross, but what about a seller with 1500 gross?
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Old 11-07-2018
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Default Re: IRS TAX. Reporting and filing.

they will go after your 1 cent

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