So is the new tax reporting for eBay and PayPal in 2011 going to change how you do things regarding PP... or maybe even change your opinion about using them at all? Just curious how people feel about it.
I think he is talking about the new 1099 reporting for vendors. Which says any purchase for a business over $600, the buyer has to issue a 1099. However, this is the important part .. (and a certain political side keeps leaving it out) this does not apply for credit or debit card purchases. So I would think ebay would be mostly exempt.
It's goal is to get cash payments above the table and therefore taxable.
(I know about it and I am not even an American ;-) )
If you buy a $300 item from an eBay seller, you don't need to issue a 1099. If you later buy a $400 item from the same eBay seller, you would then be over the $600 threshold and would need to issue a 1099.
If you paid with a credit card through PayPal, then you may not need need to issue a 1099*. But if you paid through funds you had in your PayPal account, then you would still need to issue a 1099.
*It all depends on how the IRS defines the transaction. Technically, eBay is charging the credit card and then paying the seller, so the IRS could rule that the transaction falls outside the credit card exemption.
I was referring to the PP/eBay income reporting in 2011. I've heard some people say they will stop using them because of that. I was just curious if that was a common feeling. I personally don't love the idea, but what are you going to do.
I don't see what the issue is if you report your income correctly. If you are selling $50K a year and not filing your taxes properly, too bad for you. The rest of us honest business people won't be shedding many tears.