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Sat Apr 7 2012 12:49:24

Seller Gets 1099K from PayPal 9 Days Before Tax Deadline

By: Ina Steiner
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Dear Ina,
Thought you should know that today, Friday April 6th, I received a 1099k form from PayPal - 9 days before taxes are due!

When I contacted PayPal, I was told "this is the first year we are sending put forms" and "we made a mistake". This form is for a second account that we no longer use. I did receive a form on January for my current account and I did call in January to ask if I would be getting a form for the other account - which I was told probably not, but if so, it would be sent out very soon.

Guess I will be spending this weekend redoing my taxes because PayPal "made a mistake" and didn't send the form on time.

There is normally a deadline of January 29th for 1099k's to be mailed, but the IRS site states the deadline has been revoked due to problems with getting these forms sent out on time (because of the new regulations).

I'm a casual eBay seller, but this year was good and we were lucky in our sales, so this is the first year dealing with taxes, etc.

Have you heard from other PayPal users on this delay?
Thank you!
C.




Comments (18) | Permalink
Readers Comments

Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: BetterThingsToDo This user has validated their user name.
       
Sat Apr 7 15:06:39 2012
UMMM you have to redo your taxes now because you finally got a 1099 form.

Something wrong with that statement. Did you think you didn't have to pay taxes on the money earned. OOPS ME BAD.
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: annie This user has validated their user name.
       
Sat Apr 7 17:19:42 2012
You do not need to redo your taxes!  I also just received one for my merchant account, apparently this is some sort of a test run for the forms.  The reporting requirement did not take effect until this year, 2012 is the first tax year that it has to be reported.  
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: annie This user has validated their user name.
       
Sat Apr 7 17:21:03 2012
PS I mean that the 1099K is required to be included on your taxes, you should have no problems as long as you have been reporting all your income.
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: NullApps This user has validated their user name.
       Web Site
Sun Apr 8 03:44:17 2012
As someone with multiple PayPal accounts I just received one for my old eBay seller account on April 7th.  Made $4.40 the entire year.  Completely forgot about that so yeah I have to redo my taxes just so the IRS gets an extra $2.
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: abtlady This user has validated their user name.
       
Mon Apr 9 01:00:28 2012
I got the same form and I only used that account for the first 6 months of 2011 and then closed it. I tried to sign in to that old account to get the year end reports but I couldn't even sign in! Now I have to have my CPA redo my taxes too! Not good Paypal, you flubbed up again!  
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
This user has validated their user name. by: Marie
       
Mon Apr 9 03:11:58 2012
@annie

I think you misunderstand the new 1099K rules.  They are in effect starting 2011 NOT 2012.  However because they are new, IRS is not requiring that you put the amount from the 1099K on your tax return on the line provided for 1099k's.  HOWEVER they expect you to report your proper income and they do expect you to make a "good faith effort" to reconcile the 1099K and the income stated on them.

It's important to keep in mind that IRS is getting these 1099Ks too.  So if you don't report your income, they will know and you could cause yourself some serious problems.

OP, I'm with a few others regarding your taxes.  If you had reported your proper income, there should be no need to redo your taxes.  If you didn't report the income from that second account, then that was wrong and certainly should be corrected.
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
This user has validated their user name. by: Anonymous Annie
       
Mon Apr 9 07:13:51 2012
I think the purpose of the reporting and the form is to ''keep honest folks honest''.

Even without the form, if someone has been keeping accurate records of their income, a total re-work of taxes shouldn't be necessary.
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: fireangel This user has validated their user name.
       Web Site
Mon Apr 9 09:17:33 2012
Yep, I received a 1099 for one of my PP accounts on Friday last week.  Still haven't seen one for the other account.  I'll also mention that the total sold from the account was just a bit over $15,000 so it was well under the IRS $20,000 on which 1099's were supposed to be issued.  AND I've already filed and received my tax refunds.  Thankfully my numbers match PP's.  
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: minibeesknees This user has validated their user name.
       
Mon Apr 9 09:28:58 2012
Taxes are done from bookkeeping records, not 1099s.  Regardless of any and all 1099s you got, if your books are straight, then your taxes should have been done correctly.  You didn't have to spend the weekend redoing your taxes, all you have to do is file a 1040X correcting your figures.  It is about six lines.  
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: sunworshpr This user has validated their user name.
       
Mon Apr 9 09:52:36 2012
Many of you posting here should be embarrassed. PayPal doesn't send 1099s unless you have at least $20,000 in transactions for the year. How could you possibly not be already be claiming this income? Apparently you need a certain piece of paper to force you to be HONEST?

@abtlady: PayPal flubbed nothing. Just because you haven't used an account for 6 months doesn't make the income go away.  
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: abtlady This user has validated their user name.
       
Mon Apr 9 10:30:07 2012
No it doesn't make the income go away, but when I closed that account Paypal would not let me in anymore to get my reports. THEN, my bad, it forgot about it. Paypal should still let me in to get reports!
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
This user has validated their user name. by: iheartjacksparrow
       
Mon Apr 9 10:30:15 2012
For those of you saying PayPal shouldn't be sending 1099K Forms unless you make $20,000 or above: I read a while back that PayPal, Google Checkout, and other payment processors will be sending out 1099K Forms if you make somewhere close to the threshold since they don't know how many accounts each person operates under, so there's a possibility that all accounts combined could be over the $20,000 minimum and, therefore, must be reported.
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: Theresa This user has validated their user name.
       
Mon Apr 9 12:00:14 2012
This happened to  me too, but little differently as I only have one account.  Received first 1099 arond Feb 3rd for a $300,000.  9 days ago received a second for $25,000 stating it was third party sales.  What does that even mean?  I don't have a separate merchant CC account???  I already filed for an extension so not that big of deal and I file honestly, but still, WTH?
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: Theresa This user has validated their user name.
       
Mon Apr 9 12:03:27 2012
that should have said "third party merchant sales".  I really don't know what that means as it does not apply to me.
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: LauraM This user has validated their user name.
       Web Site
Mon Apr 9 12:09:09 2012
The 1099-K limits apply to the SUM of your PayPal accounts.  So, as long as the sum is above the limits, you will get one 1099-K for each account.  That's why people could be receiving 1099-Ks for a few dollars.
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: comet This user has validated their user name.
       
Mon Apr 9 23:44:11 2012
Is bashing the alleged "Tax Cheats" here really USEFUL?  

For all YOU know they could mean that they spent five minutes going over the amounts and possibly correcting some figures.  To decide that you are the judge jury and executioner here is very disturbing.  

And BTW--I would be THRILLED if I made ENOUGH from ebay to even THINK about getting one of them 1099's.  With the dismal sales and views on ebay I dunno how ANY sellers that are actually based in the USA are making enough to get these!
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: BetterThingsToDo This user has validated their user name.
       
Wed Apr 11 19:53:34 2012
@ comet

You don't need a 1099 to file taxes with. You should be DECLARING ALL INCOME NO MATTER IF IT IS 1.00 OR 100,000.

THATS THE LAW
Seller Gets 1099K from PayPal 9 Days Before Tax De   Seller Gets 1099K from PayPal 9 Days Before Tax De
by: Sierra This user has validated their user name.
       
Mon Aug 20 08:30:41 2012
abtlady: You closed the PP account! YOU closed it. YOU should have gotten everything you needed from that account prior to closing it, plain and simple. Have you ever changed your email address? Same thing! Be sure you have all the emails you want/need from the about-to-be-closed email account before closing it!

sunworshpr: The IRS rule is that the 1099K's need to be issued if the seller receives $20,000 or more AND has more than 200 transactions from a single payment processor. This means that you could get a 1099K from PayPal, another from Etsy (if you're using their new Direct Checkout), another from Google Wallet, and so on ... IF you meet whatever arbitrary line they've drawn in the sandbytes long before that $20,000/200 sales mark has been reached.

Etsy requests a seller's SSN after about 50 sales in a calendar year, regardless of the dollar amount of sales. This could happen even if the seller has only sold about $1,000 with absolutely NO hope of reaching $20,000, but they will still demand ... DEMAND!! ... the seller's SSN long before reaching the mandatory reporting point. I sell very little on eBay anymore, so I don't know at what point they request a seller's SSN.


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