Does PayPal report your income?

Discussion in 'General Business' started by DCharles, Jul 29, 2008.

  1. #1
    Does paypal report your income to the IRS?
     
    DCharles, Jul 29, 2008 IP
  2. LeenkzMike

    LeenkzMike Peon

    Messages:
    46
    Likes Received:
    2
    Best Answers:
    0
    Trophy Points:
    0
    #2
    I am not 100% sure, but I would assume that if you make more than $600, they would have to send you a 1099.

    But then again, since Paypal is not actually paying you anything, only moving money from other people to you, it could get complicated!! hummm
     
    LeenkzMike, Jul 29, 2008 IP
  3. Ikaruga

    Ikaruga Active Member

    Messages:
    1,840
    Likes Received:
    50
    Best Answers:
    0
    Trophy Points:
    90
    #3
    Paypal doesn't report your balance to the IRS. They're not paying you for anything, nor is your balance considered true "income".
     
    Ikaruga, Jul 29, 2008 IP
  4. DCharles

    DCharles Peon

    Messages:
    30
    Likes Received:
    0
    Best Answers:
    0
    Trophy Points:
    0
    #4
    so basically if I got a paypal debit card
    I could live virtually tax free?
     
    DCharles, Jul 29, 2008 IP
  5. DCharles

    DCharles Peon

    Messages:
    30
    Likes Received:
    0
    Best Answers:
    0
    Trophy Points:
    0
    #5
    That is to say if you were to just use the debit card
    and never withdraw your balance . . . .
    They'd never report your purchases?
     
    DCharles, Jul 29, 2008 IP
  6. mentos

    mentos Prominent Member

    Messages:
    15,280
    Likes Received:
    473
    Best Answers:
    0
    Trophy Points:
    330
    #6
    AFAIK
    No they don't
     
    mentos, Jul 29, 2008 IP
  7. gpearce

    gpearce Active Member

    Messages:
    1,432
    Likes Received:
    49
    Best Answers:
    0
    Trophy Points:
    90
    #7
    Paypal don't report to the IRS as a matter of protocol, but by financing laws, if the IRS requests information, Paypal are obliged to hand it over, I think.
     
    gpearce, Jul 29, 2008 IP
  8. Essociate

    Essociate Peon

    Messages:
    466
    Likes Received:
    6
    Best Answers:
    0
    Trophy Points:
    0
    #8
    also they are regulated since all currency exchanges in the U.S. have to be registered.
     
    Essociate, Jul 29, 2008 IP
  9. seojag

    seojag Peon

    Messages:
    23
    Likes Received:
    0
    Best Answers:
    0
    Trophy Points:
    0
    #9
    I dont see how paypal would know your income. For example, someone buys your used laptop on ebay, thats not income.
     
    seojag, Jul 29, 2008 IP
  10. Essociate

    Essociate Peon

    Messages:
    466
    Likes Received:
    6
    Best Answers:
    0
    Trophy Points:
    0
    #10
    it would be naive to think that if you have a lot of activity, especially with international payments, that the fed's are not watching and paypal is not playing ball.
     
    Essociate, Jul 29, 2008 IP
    jrbiz likes this.
  11. DCharles

    DCharles Peon

    Messages:
    30
    Likes Received:
    0
    Best Answers:
    0
    Trophy Points:
    0
    #11
    you have a point
     
    DCharles, Jul 29, 2008 IP
  12. !Unreal

    !Unreal Well-Known Member

    Messages:
    1,671
    Likes Received:
    27
    Best Answers:
    0
    Trophy Points:
    165
    #12
    Dont try to escape the tax man. He will catch up with you one way or another.
     
    !Unreal, Jul 29, 2008 IP
  13. latoya

    latoya Active Member

    Messages:
    749
    Likes Received:
    73
    Best Answers:
    0
    Trophy Points:
    70
    #13
    If you ever get audited, the IRS would discover your Paypal account - it's tied to your checking account. So the IRS looks at your checking account seesdebits or credits from PP, they're going ask to see your PP account. Also, check out this piece on Paypal IRS Notice from Snopes.com. The IRS can go directly to PP and you might not know until you're getting fined for evading taxes.
     
    latoya, Jul 30, 2008 IP
  14. Barefootsies

    Barefootsies Well-Known Member

    Messages:
    2,997
    Likes Received:
    57
    Best Answers:
    0
    Trophy Points:
    165
    #14
    Paypal does not. But if asked, they will hand it over.

    On another note, the government (US) CAN see all electronic transactions if they wanted to thumb your bung. My old college roommate works for Homeland Security out of Detroit, and has told me as much.

    If they are put in you for investigation purposes, they can go into some system and check for all electronic transactions to your account(s). Some FOC offices have access to this system as well. He worked there before H.L.S..

    Luckily, most government agencies are too busy dealing with real criminals and do not have time to chase you down. But there is a simple solution.

    Pay your f'g taxes. The end.
     
    Barefootsies, Jul 30, 2008 IP
  15. immortality

    immortality Peon

    Messages:
    1,512
    Likes Received:
    50
    Best Answers:
    0
    Trophy Points:
    0
    #15
    If you deal with a significant amount of money the IRS will find out and will get records from PayPal. Dont try to evade taxes, you will eventually get caught. It's just not worth it.

    Wrong. They have people in the government working for the sole reason to deal with things like this.
     
    immortality, Jul 30, 2008 IP
  16. Barefootsies

    Barefootsies Well-Known Member

    Messages:
    2,997
    Likes Received:
    57
    Best Answers:
    0
    Trophy Points:
    165
    #16
    I said 'most' toots. Not all.

    Learn to read.
     
    Barefootsies, Jul 30, 2008 IP
  17. xous

    xous Active Member

    Messages:
    173
    Likes Received:
    11
    Best Answers:
    0
    Trophy Points:
    60
    #17
    If you are bringing in a lot of money through paypal it might be in your best interest to incorporate your business in a tax haven and setup a bank account and paypal account in that country. If done right it is perfectly legal and keep you out of jail if your audited. (This is only cheaper if your paying $x,xxx+ in taxes/year)

    As always talk to a accountant to see what works best for you.
     
    xous, Jul 30, 2008 IP
  18. KarlMiller

    KarlMiller Active Member

    Messages:
    242
    Likes Received:
    1
    Best Answers:
    0
    Trophy Points:
    53
    #18
    I just love Pay Pal,
    They have saved me so much headache. There credit card is great and my account earns dividends.
    It is great they do not report to Tax Man but even if they did I would still use.
     
    KarlMiller, Jul 30, 2008 IP
  19. punkownz

    punkownz Peon

    Messages:
    54
    Likes Received:
    0
    Best Answers:
    0
    Trophy Points:
    0
    #19
    Paypal monitor's it they charge interest...
     
    punkownz, Jul 30, 2008 IP
  20. punkownz

    punkownz Peon

    Messages:
    54
    Likes Received:
    0
    Best Answers:
    0
    Trophy Points:
    0
    #20
    BUT I use paypal as it is fast and easy
     
    punkownz, Jul 30, 2008 IP