Here is a Fact if you sell on line and want to keep your Paypal Transactions below 200 Items

[emazers]

So I guess everybody know's if you make over $20,000 and have over 200 Paypal Transactions Paypal sends you a w2 Statement to you and the IRS. When this started 2 years ago I called Paypal and asked them about Chargebacks, Chargebacks are when you buy something with your Paypal credit card and then you return it to say Target Etc and you get your money back, well thats a Chargeback and that count's toward you receiving money, Paypal told me it didn't count, but guess what it does count. So 2 years ago I got the w2 from Paypal saying I made $65,000 but had 210 Paypal Transactions, so this won't affect most people on here but if you sell alot keep that in mine. So if I buy Lego's and I think there is a chance I might return them I pay with cash. So as of right now I have 82 Paypal Transactions.

[redeemed763]

I wondered about this, normally a refund is not considered a taxable event, personally, I have over $7k in chargebacks right now, if I were to break 20k and never even sell a dime worth of product, I would still get a statement sent to the IRS saying that I "made" 20k? Paypal stinks, I am using my credit card from now, they never send the gov an earnings statement because of a refund! By the way, wouldn't they send you a 1099, not a W2?

[Mos_Eisley]

Yes, you get a 1099-K from Paypal, which is what they also send the IRS.

[emes]

By the way, wouldn't they send you a 1099, not a W2?

Yes, that's probably what he meant.

W2's are issued by an employer to employees. 1099 Series is income other than wages issued usually by one legal entity to another.

As far at the original topic of this post...it's not PayPal's job to do your accounting for you. They are required to report transactions...it's your job to account for the difference between the transaction value reported and the amount of chargebacks. The only way you'd be taxed on a refund is if you fail to properly account for it.

[emazers]

yes it is a 1099 that I got, but like I said you have to do over $20,000 and over 200 Paypal Transactions to get one.

[dimsumonly]

yes it is a 1099 that I got, but like I said you have to do over $20,000 and over 200 Paypal Transactions to get one.

I believe it's $20,000 OR over 200 transactions. Yes it sucks but it's the government.

[Mos_Eisley]

I believe it's $20,000 OR over 200 transactions. Yes it sucks but it's the government.

No, it's $20,000+ AND 200+ transactions.

[willy431]

Man...that $20k annual is catching up quick! I already have 4 other cralwlers Sold using paypal --non eBay---so well over a quarter of the way...and we haven't even hit the season yet. Must pace myself!

[DoNotInsertIntoMouth]

Good to know. Luckily I haven't had to return too much stuff, but definitely could happen in the future.

[emazers]

And Don't forget if you buy something and return it using your Paypal Credit card thats called a Charge-back and that count's as a transaction, and don't forget the money paypal gives you each month if you have a Paypal Premire Credit card thats a transaction to.Here is an example I spent $4,698.91 in August and got $70.49 Money Back. Ed

[asharerin]

Did not realize a refund to a Paypal branded credit card would be treated as a transaction. Thanks for the heads up! Most of my customers send money as a personal payment which Paypal does not count as a transaction. It is against their TOS but it beats dealing with SNADs and 1099s.

[emazers]

Yes Personal payments don't count, but if you get to many like that Paypal will say something. The First year this started I called Paypal and asked if Charge-backs count and they said no, so when I was getting damaged Lego sets from Amazon etc, I would go buy the good boxes in target, Walmart Etc, and take the bad boxes back for a refund, the problem I was Charging them, so the charge-backs piled up, and thats the year I got the 1099. So now always pay cash if you think you are returning something.

[Polar_Beast]

So I guess everybody know's if you make over $20,000 and have over 200 Paypal Transactions Paypal sends you a w2 Statement to you and the IRS. When this started 2 years ago I called Paypal and asked them about Chargebacks, Chargebacks are when you buy something with your Paypal credit card and then you return it to say Target Etc and you get your money back, well thats a Chargeback and that count's toward you receiving money, Paypal told me it didn't count, but guess what it does count. So 2 years ago I got the w2 from Paypal saying I made $65,000 but had 210 Paypal Transactions, so this won't affect most people on here but if you sell alot keep that in mine. So if I buy Lego's and I think there is a chance I might return them I pay with cash. So as of right now I have 82 Paypal Transactions.

I ashamed to say I did not know this. Can someone please clarify, is it $20k AND 200 transactions, or is it $20k OR 200 transactions? Also, for both the $20k and 200 transactions, are we talking payments received only, or both payments sent and received?

 

Thanks for the help!

[emazers]

You have to have over 200 Paypal Transactions and Over $20,000 Made "It has to be both" And the 200 Paypal Transactions do not have to be all ebay, I could paypal you $500 for a Lego set, so thats a transaction. You sending Payments does not count toward none of this, and again if you and your wife go out and buy a $500 TV, and you return it for your money back, well thats a charge-back, and that counts as a paypal transaction.

[Polar_Beast]

You have to have over 200 Paypal Transactions and Over $20,000 Made "It has to be both" And the 200 Paypal Transactions do not have to be all ebay, I could paypal you $500 for a Lego set, so thats a transaction. You sending Payments does not count toward none of this, and again if you and your wife go out and buy a $500 TV, and you return it for your money back, well thats a charge-back, and that counts as a paypal transaction.

Thanks dude, you're the man! Appreciate the info as always!

 

-PB

[asharerin]

Yes Personal payments don't count, but if you get to many like that Paypal will say something. The First year this started I called Paypal and asked if Charge-backs count and they said no, so when I was getting damaged Lego sets from Amazon etc, I would go buy the good boxes in target, Walmart Etc, and take the bad boxes back for a refund, the problem I was Charging them, so the charge-backs piled up, and thats the year I got the 1099. So now always pay cash if you think you are returning something.

Why don't you use a different credit card besides a Paypal credit card?

[willy431]

I was looking around the paypal site, and can't seem to find a running total of payments received for calender year.  Has anyone else found where this information might be found?

[Fcbarcelona101]

I was looking around the paypal site, and can't seem to find a running total of payments received for calender year.  Has anyone else found where this information might be found?

 

Unless you add all the transactions one by one, there is not an option like that for personal accounts. There might be one for Premier or Business.

 

The only way I have been able to get my YTD total is by calling Paypal and speaking with an account specialist (usually not the first agent that picks up the phone, they transfer you).

[pickleboy]

While I understand the concern about the charge backs and wanting to avoid the accounting hassle of telling the IRS that not all of that is profit etc.  I am about to say something that will probably get me boo'd out of the building...I know this thread is not about how to avoid taxes but to avoid chargebacks but there are some who are interested in not getting a 1099 in the hopes of hiding their income. 

I don't recommend hiding any PROFITS from  the IRS.  It is illegal.  No you probably won't get caught but to me, that is not the point. 

I am not an accountant and won't pretend to be but this article might help some...(It's about garage sales but you'll get the gist.) 

http://blogs.hrblock.com/2012/07/25/garage-sale-money-does-the-irs-need-to-know/


Taxes suck but so do tax cheats.  If you don't like paying them, campaign for those who are trying to lower them.

Sorry I don't mean to tell others how to do their business, I just thought it was important for those who are reading this thread know that taxes legally need to paid whether it is reported to the IRS or not.  A good accountant will be able to advise you on how to keep your tax obligations to a min.  (IE what kind of deductibles you can use etc.) 

Let the booing begin!!!   

[Guest TabbyBoy]

While I understand the concern about the charge backs and wanting to avoid the accounting hassle of telling the IRS that not all of that is profit etc.  I am about to say something that will probably get me boo'd out of the building...I know this thread is not about how to avoid taxes but to avoid chargebacks but there are some who are interested in not getting a 1099 in the hopes of hiding their income. 

I don't recommend hiding any PROFITS from  the IRS.  It is illegal.  No you probably won't get caught but to me, that is not the point. 

I am not an accountant and won't pretend to be but this article might help some...(It's about garage sales but you'll get the gist.) 

http://blogs.hrblock.com/2012/07/25/garage-sale-money-does-the-irs-need-to-know/

Taxes suck but so do tax cheats.  If you don't like paying them, campaign for those who are trying to lower them.

Sorry I don't mean to tell others how to do their business, I just thought it was important for those who are reading this thread know that taxes legally need to paid whether it is reported to the IRS or not.  A good accountant will be able to advise you on how to keep your tax obligations to a min.  (IE what kind of deductibles you can use etc.) 

Let the booing begin!!! 

 

 

No boos from me mate as I can only agree with you.  That is why I've spoken to my accountant and taken on his advice.  In the UK, I can get round paying too much tax by stating that I'm selling part of a personal collection (which it actually is) whether it makes a profit or not.  This means that I'm liable for Capital Gains Tax rather than Income Tax and I can "make" up to

[pickleboy]

No boos from me mate as I can only agree with you.  That is why I've spoken to my accountant and taken on his advice.  In the UK, I can get round paying too much tax by stating that I'm selling part of a personal collection (which it actually is) whether it makes a profit or not.  This means that I'm liable for Capital Gains Tax rather than Income Tax and I can "make" up to

[Alcarin]

While I understand the concern about the charge backs and wanting to avoid the accounting hassle of telling the IRS that not all of that is profit etc.  I am about to say something that will probably get me boo'd out of the building...I know this thread is not about how to avoid taxes but to avoid chargebacks but there are some who are interested in not getting a 1099 in the hopes of hiding their income. 

I don't recommend hiding any PROFITS from  the IRS.  It is illegal.  No you probably won't get caught but to me, that is not the point. 

I am not an accountant and won't pretend to be but this article might help some...(It's about garage sales but you'll get the gist.) 

http://blogs.hrblock.com/2012/07/25/garage-sale-money-does-the-irs-need-to-know/

Taxes suck but so do tax cheats.  If you don't like paying them, campaign for those who are trying to lower them.

Sorry I don't mean to tell others how to do their business, I just thought it was important for those who are reading this thread know that taxes legally need to paid whether it is reported to the IRS or not.  A good accountant will be able to advise you on how to keep your tax obligations to a min.  (IE what kind of deductibles you can use etc.) 

Let the booing begin!!! 

 

 

Dont do that now some members like DonNotInsertintoMouth and so on will come to tell you you should not talk that because obviously noone is cheating taxes and so on

 

laughable... but you shall see!

[sadowsk1]

Glad this doesn't affect me.  I enjoy Lego, but I wouldn't want that much tied up in them as far as investments go or any collectible toy in general.  I'm sure the money can be there, but I don't have that much to speculate with.

[Fcbarcelona101]

Well, this has nothing to do with the original intent of the topic, but those who have been here a while know I usually don't get involved in this type of discussion often so indulge me for a second.

This is not directed ay anyone in specific, but for those people that throw in the morality issue along with taxes I do have some thoughts. Back in my country of origin, we have a government of crooks, murderer, kidnappers and pretty much every other criminal type you can think of. Would you consider morally right to continue giving your money to these individuals just because it is the law? I know I wouldn't.

Before anyone jumps at me, I am not comparing my experience to the US, only trying to bring a different perspective.

[pickleboy]

This is not directed ay anyone in specific, but for those people that throw in the morality issue along with taxes I do have some thoughts. Back in my country of origin, we have a government of crooks, murderer, kidnappers and pretty much every other criminal type you can think of. Would you consider morally right to continue giving your money to these individuals just because it is the law? I know I wouldn't.

And that's why you left? 

Too each their own.  I just want those who aren't overly familiar with the rules to know that legally they are responsible whether they get a 1099 or not. I'm certainly not going to tell anyone what to do.  ...just the more info...the better...