Important Information Regarding PayPal, Merchant Accounts and the IRS

Beginning at the start of 2011 the laws regarding the reporting of electronic transactions changed. If you accept credit cards using a merchant account or if you accept payments via PayPal you should know that under many circumstances the income will be reported to the IRS. Failure to claim the revenue on your taxes can draw extra attention from the IRS; something even the most honest person would like to avoid.

If you accept payments via PayPal this could apply to you:
https://www.thepaypalblog.com/2008/0...ts-become-law/

If you have a merchant account that allows you to accept credit card payments this will impact you:
http://taxes.about.com/od/businessta...dreporting.htm

It will be interesting to see what impact, if any, this has on reptile prices.

You knew it was coming. The government is broke and will not cut spending so you know the have to get more money somehow. It's coming out of people pocket.

I expect they will also go after Google checkout.

The odd thing is that the requirements are quite different from the 1099 requirement, but it is the IRS after all.
"1. receive more than $20,000 in payment volume in a single year; and
2. receive more than 200 payments in a single year."

Ehhhhhhhhhhhhhhhhhhhhhhhhhhhh...poop.

Well, thanks for the heads up...

Very useful info.

I just want to add if you use the Square credit card system (https://squareup.com/) they will not be reporting anything to the IRS until 2012. Details can be found here:https://help.squareup.com/customer/p...rt-to-the-irs-

I know paypay allows you to have two accounts, one personal and one business. I can see a number of husband/wife teams making two each and just dividing payments among those different accounts. That would allow up to 80k before anything gets reported.

Thank you for posting, great info :gj:

I buy a lot of orchids and other plants online. Already many of the vendors and most of the private individuals selling will no longer accept Paypal. I now suspect this may be why.

Quote:

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Originally Posted by fishmommy

I buy a lot of orchids and other plants online. Already many of the vendors and most of the private individuals selling will no longer accept Paypal. I now suspect this may be why.

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Could also be because it is very easy to get ripped off using their service. They almost always side with buyers and offer very little seller protection.

I see this not lasting for many years. New president means looking to "help small business". But for the time being many will find ways around this new issue but others will just deal with the new taxes.