Paying Taxes on Stealth Accounts

[Killed by Ebay]

How do i pay taxes on my stealth ebay and Payal accounts? Since they are not on my name how do i show the IRS reciepts that dont have my name on them?

[Lyda]

I think you will have to open small business in each of those Stealth names if you are so eager to pay Ebay taxes.

[gurusgrafx]

you really only have to worry about it if you get audited. in my area you can just start doing business using a made up name (DBA) and not have to get a license for it. you can even open a bank account as a sole proprietorship in your name DBA your made up company name and start taking checks that way. in theory your DBA could resemble a persons name.

[Lyda]

Exactly, that's what I do...

[Killed by Ebay]

I dont have to show reciepts for my deductions? Sorry but i am new to the taxing part of it so if anyone could help me out that would be great!

Reciepts are only neccessary if i get audited?

[Lyda]

Yes, so if you are taking deductions you need to also report the income. Receipts you need only if you get audited. My lawyer once told me I have to save all my returns going back 6 years. I am not an expert on this, so maybe someone else can explain better.

[BooMer]

Originally Posted by Killed by Ebay

How do i pay taxes on my stealth ebay and Payal accounts? Since they are not on my name how do i show the IRS reciepts that dont have my name on them?

Why would you want to. There is so many people out there that don't pay taxes on ebay profits. The IRS is aware of this and starting in 2010 they will require Paypal to send statements from sellers who goes over a certain volume.

So right now don't bother on paying taxes on a "STEALTH ACCOUNT" that is not in your name.

BooMer

[gurusgrafx]

The only reason I pay taxes on mine is I have 4 kids. So at the end of the day after my deductions I end up getting close to $4,000 in earned income credit. Free money for me

[NO ID]

Wont you still get that much regardless? ^^^

[gurusgrafx]

^^^ nah, ebay is my only income right now. if I didn't report it I'd get nothing. I have to change it up this year tho, either find a job or start up another company.

[ovidiu]

Well, they will need SSN's or TIN's to do any of this, so when eBay & Paypal starting demanding them, you know the IRS has arrived.

[gurusgrafx]

Yeah but like BooMer said, for all you guys that don't report the income stealth accounts will be great. just make a new one when you hit the limit. Or with a little creative thinking change countries.

[ovidiu]

I would like it to be that way, but I don't think that's how it will go down. This is what I think will happen if Paypal/eBay reporting happens:

eBay will probably not require a SSN, why bother

but Paypal will require one from the get-go, for each and every account, unless they create a new type of account just for sending payments

If Paypal does not require a SSN from the get-go, they will require one as soon as you hit the $400 threshold for reporting business income.

It makes no sense for Paypal to ask for a SSN only when you hit 20grand. Everyone would open multiple accounts and avoid the new requirements. Now I might be missing something here, but it looks pretty gloomy.

[gurusgrafx]

yeah I'm kinda expecting them to make SSN mandatory for new accounts when it happens. when it hits that point I'm just wondering how many sellers drop off ebay completely. but you will still have options.

then again if they get a SSN off the bat from everyone they'll really have no reason to be limiting accounts and holding money for 6 months. So they more than likely will leave it open and just spring the SSN requests on you at random points so they can make interest off of the money they lock up from people like us. I mean really who doesn't have 4 or 5 accounts right now with money in them?

[ovidiu]

It's not about what Paypal wants to do. The scenario I described would probably happen if/when the IRS forces Paypal to report income. If they need to report income, a SSN or TIN to go along with the account is a given. The IRS always wants the SSN. So I guess we can all look forward to that.

[gurusgrafx]

well look at what happens in Australia. they can make so much in a year before they have to provide proof of id for the government. paypal didn't make it mandatory until they hit that mark. it may not turn out all bad, but I kinda expect it.

[ovidiu]

The way that bill is written certainly points to some administrative entity with final say in how the rules are actually implemented & enforced. That means we won't really have the full story until the rules are written by Treasury (I guess) and we hear official policy statements.

EDIT: I mean the housing recovery bill that included those little extras which was the fire that was lit under our collective butts.

[Killed by Ebay]

Originally Posted by BooMer

Why would you want to. There is so many people out there that don't pay taxes on ebay profits. The IRS is aware of this and starting in 2010 they will require Paypal to send statements from sellers who goes over a certain volume.

So right now don't bother on paying taxes on a "STEALTH ACCOUNT" that is not in your name.

BooMer

Well when its time to start reporting how do we do it on ⊗⊗⊗⊗ names?

But anyways, noone has answered my question

[ovidiu]

It doesn't matter what name's you're using, unless they are required to do 1099's. If they do 1099's, you will need to get a real DBA and a Taxpayer Identification Number (TIN), I'd say.

[mmac900]

Originally Posted by ovidiu

It's not about what Paypal wants to do. The scenario I described would probably happen if/when the IRS forces Paypal to report income. If they need to report income, a SSN or TIN to go along with the account is a given. The IRS always wants the SSN. So I guess we can all look forward to that.

How about being a little bit more optimistic? It's not the end of the world yet, I'm sure we won't be required to provide ssn with all new accounts because than no one would register and paypal/ebay would go bankrupt. I bet it will be over a certain amount as another user has pointed out.

[ovidiu]

I sure hope so. Not that the IRS would really care if eBay goes bankrupt.

[gurusgrafx]

Originally Posted by Killed by Ebay

Well when its time to start reporting how do we do it on ⊗⊗⊗⊗ names?

But anyways, noone has answered my question

Like I was saying before. just pay your taxes like you would usually do if all paypal accounts were in your name. then if you get audited tell them the ⊗⊗⊗⊗ names are DBA's. not that complicated.. but you do need to check that you can do it without registering the name in your county/state or whatever.