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Originally Posted by Sly
I don't think it should be a big deal for businesses that use PayPal, many already do report or should be reporting by themselves. I do though think it's a big deal for the small hobbyist that occasionally sells or buys things on eBay... it's doubtful that they will know how to or be organized enough to write off expenses as they would be allowed to, so they could potentially get stuck. Be interesting to see what happens.
I also wonder if families use PayPal to give each other money for spending or whatever. College kids, brothers, sisters, etc. Those people should not be taxed on that money, it's no different than exchanging hard cash.
This isn't a "PayPal thing" though, it's a new tax law stipulation.
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those things were never a problem before and they wont be now. If you send a family member a couple hundred bucks you should be doing it via check or at worst wire transfer, you would be insane to use paypal and pay all the fees anyway, especially for larger sums of money. Paypal is good for people who do business and don't know the person they are doing business with, can't send cash in the mail, and they don't want to fool with checks from them.
If you run a business and use paypal for transactions then you better report the income and keep track of your expenses and write offs. This will really only affect the people with businesses who are trying to avoid paying taxes. Be lucky we don't have to pay sales taxes, and at least report your income. Unless you making a ton of money you should have a lot of write offs to off set it anyway.
Quote:
Originally Posted by WorldwideWebGuy
Yea, that's the way I'm reading & understanding it ... it would effect only those PayPal folks who make over $20,000 "AND" process over 200 transactions a year. Was hoping someone knew or was capable of finding out more for sure. As a hobby, I find & sell quite a few things on ebay & process payment with PayPal (paying & getting paid). Most of what I make I re-invest with additional collections or purchases & expenses, so no real profit is made. There are a lot of folks similar to mine (who use PayPal to pay for & receive funds for our hobbies), but then there are the power ebay sellers who have made millions or some old people who count on PayPal or ebay to survive or get meds, etc ... its sort of like being double or triple taxed if you sell something you've already paid for & perhaps even sell at a loss. Guess folks will have to go back to selling stuff at garage or yard sales (lol).
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A hobby is still a business if you are making a profit. If you are not making a profit and buying back more product (as you said) then why not just keep track of your profit and expenses and report it all like you are suppose to anyway??? Set up an LLC for a couple bucks, and you will find a whole world of write offs you could use that you were not able to do before. You will save yourself money doing it the right way.