IRS enacts new tax law for 2011 that could affect many of us.

[nickmckinney]

IRS enacts new tax law for 2011 that could affect many of us.

http://www.irs.gov/irb/2009-10_IRB/ar09.html

Since most of us use Paypal for forum transactions:


QUOTE:
Starting in 2011, all U.S. payment providers including PayPal will be required by the Internal Revenue Service (IRS) to report sales information to the IRS about certain customers who receive payments for the sale of goods or services through PayPal. We want to help you understand these changes.

* Applies to sellers receiving over $20,000 in gross payment volume AND over 200 payments
* Applies only for sales on or after January 1, 2011

Personal payments that are not payments for the sale of goods or services will not be counted in the total to be reported. However, all payments received for the sale of goods and services will be used to calculate the gross payment volume to be reported.

END QUOTE


Everyone needs to be aware of this change if they move this kind of money though Paypal (I do more than this every month so my accountant is already getting ready for the mess should my 1099 from Paypal not match what I report) If you part out a couple cars a year it could be really easy to get caught up in this. This should be a sticky and also posted everywhere that people are selling. I just had to convert my personal Paypal account to a business account for this along with giving them my EIN number for reporting purposes. After dealing with prior 1099, when you don't have all your expenses lined up properly you could OWE money to the IRS come tax time if you sell a bunch of stuff on the forums/Ebay.

Enjoy!