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Does ebay upgrade my paypal account automatically when I upgrade it through paypal itself?

Does creating a paypal business account mean you have to pay taxes on ebay sales or only credit card charges?

  • I have always used ebay here and there (under $20,000 / year of course) but i might make a few hundred with it. SEPARATELY, i have a real life locksmithing business (starting out) and i want to use paypal to process the transactions, which requires you to make a business account or upgrade your personal account to a business account (where you need to give SSN and taxpayer ID). I dont want to go to the bank and make a new account and email so i am considering merging/upgrading my personal account to business. Obviously, i will have to pay taxes on the credit card transactions, however will the IRS automatically make me pay for my ebay revenues? Or does paypal only auto report your merchant activities? Can someone please clarify, and where is the best and easiest place to setup a mobile credit card charging account with or without a taxpayer ID because i dont have one that i know of. Thanks, Mark

  • Answer:

    If you buy items to resell on eBay and make a profit, you have to report the income whether you use a business account or not. The 1099-K is a non-issue for you as you will be reporting your revenues on the 1040 schedule C already. As a sole proprietor, your tax id is your SSN. Odds are you will not have issues at all. The 1099-K has a pretty high threshhold before it's issued and even if it was, your schedule C will show a higher total because of the cash receipts.

Mark W at Yahoo! Answers Visit the source

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If you are running a business, you have to pay taxes on all sources of income. If you are making $20,000/year from eBay, the IRS would call that a business. Failure to report income is called tax evasion, which results in a stiff fine. What made you think under-the-table income was legal?

you need to report all income to start with do just do it :) Get an ein from www.irs.gov for free paypal does not need your SSN for any reason. I have had a commercial accounts for years EIN's are valid and help protect you from ID fraud. they will require you fax the EIN letter to them as proof of EIN Takes 15 minutes

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