Ok I read this:
any accounts out there? PLEASE HELP
I uderstand this:
the report will start for year 2011 Right?
that is for that year
or the year 2010 since taxes are done on April 15th the following year.
or will this report be done for the year 2011 and reported the that year of income in 2012?
I have asked my account she was not aware of this law, I have asked Paypal they know nothing of the Law. But now Auctiva has send this out can some one clearify.
I think what it is: 2011 and reported the that year of income in 2012
from what I am reading but I hope that I am right for I can not get an anwer from paypal.
then my next questions 1 AND 2 is:
1. Will ebay also report your sales?
2. Will paypal be sending you a W2 or a form to give to your accountant showing how much money you have collected?
Credit Cards, PayPal to Report Sellers' Income to IRS
New housing law brings tax implications for U.S. eBay sellers.
by Auctiva.com staff writer - Aug 07, 2008
The Housing and Economy Recovery Act of 2008, which was signed into law on July 30, is of particular importance to online sellers—regardless of their housing situation.
Although much was reported about the bill throughout its year-long path to becoming law, little attention has been given to a provision that will soon require credit card companies to report an annual dollar figure that they process on behalf of each "participating payee" (e.g., eBay seller) to the Internal Revenue Service. The effective date for the reporting requirement is 2011 calendar year receipts.
The law obligates payment settlement entities like VISA and MasterCard to send both the IRS and the "participating payee" the required information in January for the previous year, in a format that is expected to emulate IRS Form 1099. Given the new law's elaborate definitions of "payment settlement entity," most, if not all, electronic payment systems will be covered. These will of course include PayPal.
In order to help the IRS associate this data with the correct taxpayer, credit card companies, debit card networks and other electronic payment processors will begin asking their customers for Taxpayer Identification Numbers. Tax IDs will typically take the form of Employer Identification Number or Social Security Number. If an accurate number is not provided, the companies will be required to withhold a whopping 28 percent of receipts.
"The limited burden of this proposal will fall on the merchant card servicing companies (which already have the information to be reported), and not on the businesses who take credit cards as a form of payment," Treasury Department spokesperson Andrew DeSouze tells Auctiva. "From the sellers' point of view, this provision will help them to be more compliant by providing an annual statement of their credit card reimbursements so they can have complete information to file their tax returns."
Not all eBay sellers will be affected by the new requirement, however. Obviously, the dwindling minority who only do business by cash, check and/or money order will experience no impact. But small sellers may also avoid the extra scrutiny, given the law's minimum threshold: Only payees with more than $20,000 in processed receipts and more than 200 transactions for the year must be reported.
Small business lobbyists fought hard against the mandatory reporting provision, but in the end they lost out to the lure of more tax revenue. "They needed the money, and it was a done deal," explains Giovanni Coratolo, director of small business policy for the U.S. Chamber of Commerce. "We kind of got lost as a low-priority item in a very high-profile bill."
Various government agencies have in recent years proffered varying estimates of how much tax revenue is lost by merchants underreporting the type of income this provision is aimed at identifying. The third-party reporting provision will raise an estimated $9.6 billion over 10 years by encouraging merchants to report their income accurately to the IRS, according to the Senate Finance Committee. According to the Joint Committee on Taxation, this provision should result in $608 million in taxes in 2012 alone.