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Showing posts with label 1099. Show all posts
Showing posts with label 1099. Show all posts

Monday, January 30, 2017

How online sellers find tax form 1099-K from Paypal

How online sellers find tax form 1099-K from Paypal

Only 
eBay sellers who exceed the IRS thresholds will receive an IRS Form 1099-K from Paypal. Sellers exceed the IRS thresholds when they received $20,000 in gross payment volume for the sale of goods or services AND have over 200 separate payments for goods or services in the same calendar year. To download and print your Paypal 1099-K, do the following:

1. Log in to Paypal
2. Click on the Activity link at the top of the Summary page
3. On the Activity page, click the drop down arrow next to the Statements link near the right hand side of the screen.
4. After clicking on the arrow, a drop down list appears. Click “Tax Documents”
5. If you have met the IRS thresholds mentioned above, a downloadable 1099-K form will appear for the tax year. If you have not met the thresholds, a simple message appears: “You have no 20xx tax documents.”

If a seller has not met the IRS thresholds, the total sales amount for the year can still be determined. United States Business & Premier Account holders have access to an Annual Financial Summary Report. Visit Taxes Made Easy with Paypal Annual Financial Summary Report for more information. Any seller can download all account activity and total the amounts for "Payments Received". Visit How Online Sellers Find Total Shipping Costs Via Paypal for Tax Filing as an example.


Sellers should have an organized bookkeeping system to store receipts. A simple and inexpensive solution is a bankers box. More sophisticated sellers may choose to store receipts digitally using a receipt scanner. Online sellers who have experience completing a tax return can file online for free using the IRS free file program. Visit How to File Federal Taxes Online for Free. Less experienced tax filers may use TurboTax which offers a guided, step-by-step questionnaire tailored to your personal income tax situation. For further information on tax laws relating to online selling, The Complete Tax Guide for E-commerce Retailers including Amazon and eBay Sellers is a great read!

How to File Federal Taxes Online for Free

Tax time is upon us. Entrepreneurs including eBay and Amazon sellers can file the Federal Tax Return online using IRS freefile. The software is available via the Internal Revenue Service IRS website: www.irs.gov
 
One must know how to prepare taxes as the software is not as user friendly as others (TaxAct, TurboTax). The tax forms are fillable and can be sent electronically, but the software lacks the interview type questionnaire available in other tax preparation software. It does, however, perform math calculations and provides basic guidance with help screens per form.

Each user will need to create a new account for every year as the information is not carried over from year to year. To complete the process more easily, I recommend the user have the following documentation available:

1. Copy of last year’s tax return. Last year’s Adjusted Gross Income (AGI) is required to e-file this year.

2. Total expenses to be used on Schedule C Profit or Loss from Business. Find out how to determine total shipping costs and transaction fees via Paypal.

How to File Federal Taxes Online for Free3. Total sales for last year. Sellers meeting the IRS thresholds will receive a 1099-K from Paypal. See how to find the 1099-K from Paypal.

4. Amount of refunds / returns for the year. Returns and allowances as well as other expenses are available on the Annual Financial Summary Report. See how to download your copy at Taxes-made-easy-with-paypal-annual-financial-summary-report

As always, research the new tax laws and consult a professional if needed.