Buyer new account in the forum

[wrxpip]

When purchasing a new account in this forum, what do i have to do with the name that is associated with the ebay/paypal if transaction goes over 20k?

[slokor]

Since adding an SSN is not an option youll need to add an EIN.
That's pretty much the only way youll be able to continue operating the account - unless you prefer to wait till the end of the year for those limits to reset themselves (which isn't very efficient on an account with those limits...)

[jeffweico]

Well, it is PayPal that will request your tax ID. If that happens, you should set up a business with an EIN. That way, you can use the business name and EIN to satisfy the requirement. It also works out great for taxes.

It may sound complicated, but it is not.

Keep in mind that PayPal is going to request that information long before you hit that mark. As soon as their algorithm tells them that you MAY go over the threshold of 200 sales and at least $20,000 in sales, they will request it.

[wrxpip]

When tax season comes up and paypal gives me a 1099 form, wont the name on the form and ein info be different?

[jeffweico]

Let me be a bit more clear. You cannot give your real SSN to PayPal on a stealth account. It will kill the account if PayPal has your SSN on file and if they don't have it on file, the name and SSN will not match when they try to verify it with the IRS.

There is NO legal way to give them an SSN that will match the name.

What we do is to create an LLC and get an EIN for the LLC. When PayPal requests your tax-id, you just upgrade to a business account and give them the EIN. That way, when they submit the information to the IRS for verification, the BUSINESS NAME will match the EIN.

When PayPal issues the 1099-k, it will be in the name of the LLC. Of course, you will have to file the paperwork that shows what your profits are and then add the profits to your personal tax return. You will owe taxes on YOUR PROFITS ONLY, NOT ON YOUR GROSS SALES! And it pays to get a tax professional to do your taxes. You would be surprised by what can be LEGALLY deducted. In many cases, people end up paying a tiny tax on their profits, or even nothing at all if they have enough deductions.

I know it can sound overwhelming, but it really isn't. And tax professionals may cost you a few bucks (I pay about $500 per year) but they can SAVE YOU THOUSANDS on your tax bill. So it makes sense to use them. Remember, tax AVOIDANCE is perfectly legal - it just means taking every deduction you are entitled to. Tax EVASION - lying about your income to avoid paying taxes - is ILLEGAL and e never recommend it. Unless you are making some ungodly amount of money and have no deductions, taxes are usually NOT a major issue anyway.

[wrxpip]

Thanks for your explanation

I plan on creating and LLC under a business name but the LLC fee in California is starting $500+. Thats the only reason why i never got one, but i should definitely consider it this year.

I have another question, how do you guys go about getting an increase for selling limits? I have 1 stealth account that has 290 items to sell but it never increased for about 2-3 months. This account was made around december, so all my holds etc have been lifted.

[slokor]

You wont get anyone to tell you how to artificially increase limits.
Your best bet is to get it done naturally by maxing out your allowed item sales per month.