I am still reluctant to add my bank account in paypal . Why ? Reason : What this allows paypal to do is keep track of all the transactions to our bank and this may in turn be liable for TAX . I prefer paying my own tax and not being enforced to paying it by force . I mean come on. . .why don't they take any fees for 7k + withdrawals ? Because they are pretty sure the 30% tax on it will make sure you wont get the better half of that 7K + Your thoughts?
Even if you get a check from paypal you're going to deposit the amount in the bank and you're liable for tax payment. Otherwise, you can keep the check with you and no need to pay tax to the country where you're living...(lol)
There is no way paypal can maintain a convincing record with the cheque method that would be sent for . .like for ex: say RBI concerning income tax issues. But with this new method , I wont be surprised if an Indian web master gets an income tax raid in the next couple of months . /* this is just my gut feeling and i don't want to change you point of view */
I've added my bank account with my paypal account so I can withdraw money. I have been doing this for over a year and paypal has not bothered anything or reported me to the tax authorities or anything. In the end, you are solely responsible for your own tax submission. Paypal does not have any authorities to access your bank account apart from paying you to it.
I think you are overthinking the whole thing. I have never heard of people having trouble with their paypal account and taxes.
PayPal doesn't bothers if you pay tax or not. Google Adsense does. They send you Tax Form if earnings are over a specific amount in a given time(for US), as I haven't never withdrawn from Adsense so far.
I wouldn't be too sure about paypal and other processors not reporting the IRS. If they don't now, they will eventually. Here's the start of paypal's reporting. Probably not applicable to your situation, but it proves that if there are gaps in the IRS's books, somewhere, they will go after the information eventually. http://www.usatoday.com/money/perfi/taxes/2006-04-11-taxes-paypal_x.htm Here's an overview of some proposals that would require payment processors to report all data to the IRS. This would include paypal and any other processor that services US businesses. http://www.greensheet.com/PriorIssues-/070202-/3.htm
this is not true PayPal never record your bank payments and paypal realy care about withdrawing your money to your bank account its much better for them to send your moneys to another paypal account instead of withdrawing it so they call you most of time when you want to withdraw and they ask you where do you get these moneys
If you are paying taxes on your own, like you say, then why would you be afraid of leaving a trail of how much you are actually making? An IRS Audit is no joke, I wouldn't take the chance of that.
I agree, sounds like a bit of a strange problem lol You are soley responsible for your own taxes, paypal I think would only intervene in cases of illegal activity or fraud and such like. I wouldnt worry, just pay your taxes as normall and everything will be hunky dory