Question about income and EIN

[meblue]

- $20,000 USD in gross ticket sales in a single year
- 200 paid transactions in the same year

Also apply in EIN? Or Paypal will still report the income even if it did not reach the $20k and 200 paid transaction?

[jeffweico]

If you do not reach BOTH 200 sales AND $20,000 then PayPal will not report your information to the IRS.

However, you still legally owe taxes on your profits. I'm pointing this out because if you ever get audited and the IRS finds out you did not report income that came in via PayPal, using the excuse that since PayPal didn't report your earnings, you didn't think you had to pay taxes is probably not going to fly.

[meblue]

Thanks for the quick reply....

[EWHendo]

Originally Posted by jeffweico

If you do not reach BOTH 200 sales AND $20,000 then PayPal will not report your information to the IRS.

However, you still legally owe taxes on your profits. I'm pointing this out because if you ever get audited and the IRS finds out you did not report income that came in via PayPal, using the excuse that since PayPal didn't report your earnings, you didn't think you had to pay taxes is probably not going to fly.

I thought this was an OR... not an AND.

That is based on when they request tax info though. Is it correct that PP asks for your tax info when you near 200 sales OR $20,000, but don't send a 1099 until you reach 200 sales AND $20,000?

[jeffweico]

PayPal asks you for a tax ID number as soon as their algorithm tells them you MAY go over 200 sales and $20,000.

And this is an AND, not an OR. For PayPal to report you have to have at least $20,000 in gross receipts AND 200 sales. There is no IRS rule that tells them exactly when they have to collect this information. Each payment processor does it their own way.

[rsot]

Originally Posted by jeffweico

PayPal asks you for a tax ID number as soon as their algorithm tells them you MAY go over 200 sales and $20,000.

This is the PROJECTED sales rate limitation EWHendo

[GreenBean]

Originally Posted by EWHendo

I thought this was an OR... not an AND.

That is based on when they request tax info though. Is it correct that PP asks for your tax info when you near 200 sales OR $20,000, but don't send a 1099 until you reach 200 sales AND $20,000?

You really need to check everything.

Introduce yourself to this site

www.irs.gov

If you do not already have a tax accountant, then at the least read the IRS site.

You alone are privy to your own income. Make sure you are covering yourself from a Tax audit.