Robert sent in this question: “I heard PayPal will start sending 1099 reports to the IRS this year. What does this mean to eBay sellers?”
Check your eBay knowledge now.
Starting in 2011, PayPal and all merchant processors will send 1099 forms to the IRS for all cleints who have done 200 or more transactions and have total sales over $20,000.
Read that again. That’s not an OR statement, it’s a BOTH statement.
This means that most eBay sellers won’t be effected by this change.
If you are effected, or think you might be effected by this change, you should make sure you are keeping track of the costs associated with your eBay business.
The 1099 form only shows gross sales. When you do your taxes, you subtract your costs from your sales to determine the profit.
Remember your costs are everything involved in running your eBay business. Here’s a few common deductions for eBay sellers:
Remember I’m not an accountant, and I don’t give legal or accounting advice. I only cover these topics so you can get an idea of the questions you should ask your accountant.
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