Quote:
Originally Posted by Lorewalker
I am sure an accountant can give you a better answer but all payment processing entities have to provide a 1099K at the end of the year. Not sure what the threshold is for one being generated. You can generate sales reports already on ebay's site.
|
The reporting rules for having to provide a 1099-K each year for seller receipts haven't changed. There are two thresholds that must both be met. Sales receipts for the year have to be $20,000 AND you have to have more than 200 transactions.
What is interesting is that these thresholds apply to each party you use to receive payments, separately. In other words, if during the year you sold on Ebay and received some payments through Paypal, and for others you got a check or took a non-Paypal related credit card for, Paypal wouldn't/shouldn't have a record of those non-Paypal payments. Therefore, those non-Paypal receipts would not count towards meeting the $20,000/200 transactions thresholds that Paypal has to look at in determining if they need to send you a 1099-K at the end of the year.
So lets say you normally do a little over $20,000 and 200 transactions on Ebay every year and have been getting 1099-K forms from Paypal the past couple of years. With this new Managed Account election Ebay is trying to push sellers to, let's say in mid-year you decide to switch and quit using Paypal as your primary payment processor. In that case chances are you won't separately go over $20,000 in sales or 200 transactions through Paypal nor through whoever handles the new Managed Accounts with Ebay. So theoretically neither group will be liable to send you a 1099-K form for that year, even though in total your Ebay sales still topped $20,000 and 200 transactions. The thresholds and reporting liability lie with whomever is responsible for processing and recording the payment activity, and not Ebay itself directly since Ebay is technically not the party that collects and remits the actual payments. At least they currently are not since Paypal in no longer owned by Ebay.
What I don't know yet is how things will work with this new group (Ayden) that Ebay is bringing in to take over for Paypal. I don't believe this new payment processing company is actually going to be owned by Ebay, like Paypal used to be at one time. If that is the case, then I assume that Ebay is still not going to be responsible for tracking and preparing the 1099-K forms for sellers. However, with this new development in regards to the sales tax rules, it seems that for certain states Ebay is now going to take responsibility for charging, collecting and remitting sales tax on behalf of all sellers to sales made to buyers in these certain states, beginning at some point in the near future. Well in that case it sounds and looks like Ebay is now being charged with keeping track of sales in certain states for sales tax purposes, so why shouldn't the federal government also expect Ebay at some point to keep track of all sales through their site for 1099-K reporting purposes?
I haven't seen anything regarding this spelled out anywhere yet. You may try contacting Ebay directly to ask them about how this 1099-K reporting is to be handled going forward, and whether or not that responsibility is shifting to them, or if it will remain with the separate payment processing entities they use. like Paypal or Ayden, this new company they're bringing in to replace Paypal. Check out this story about Ebay replacing Paypal.
https://community.ebay.com/t5/Sellin.../td-p/28062479
It unfortunately doesn't give a lot of details(no surprise there), but it does mention allowing for Ebay to better track information and sales activity for sellers. It includes the usual generic fluff about how they're doing everything for the benefit of the buyers and sellers, even though we all pretty much know they are primarily doing this for their own benefit, and/or to keep ahead and help mitigate things to come from all these recent changes in rules regarding taxes and reporting responsibilities. We'll have to wait and see exactly how Ebay is going to play this going forward and what pressure and additional reporting liabilities may be placed on them by governmental taxing authorities in the future.