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Paypal drastic changes

When you’re paid for goods and services, the US Internal Revenue Service (IRS) considers this reportable income.

Once you receive $600 in payments for goods and services within a calendar year, tax laws require us to withhold 24% of such payments when you have not confirmed your taxpayer status by either providing your US tax ID or completing a Certificate of Foreign Status. This 24% is sent to the IRS as backup withholding for any potential income tax due on those payments.

You can learn more about this tax law on the IRS website.

I tried to attach a link , but it wouldn't cooperate.

krelldog
invalid
1,269 posts
 

@bubinga 

It's the government, not the IRS, PayPal or audiogon they are just following the new tax laws. The tax payment was always due, if you made a profit, now there is just a paper trail for them to trace

ozzy's avatar
ozzy
7,582 posts
 

The "new" tax laws should reign in the tax cheaters, not the folks trying to sell used equipment.

Just another example of the Government trying to squelch the little guy...because they are easier targets...

ozzy

bubinga
108 posts
 

Invalid,

Thanks for the clarification. If you sell on AG but receive cashiers check and avoid PP,  does AG report the transaction to the IRS?  

invalid
1,269 posts
 

@bubinga 

I have no idea what Audiogon does these days.​

cfa88's avatar
cfa88
111 posts
 

Reporting Threshold $5,000 in tax year 2024

"In a key revision to the law, the IRS said that starting in tax year 2024 it will transition toward the new rule by increasing the reporting threshold from $600 to $5,000. That means people who receive more than $5,000 in payments via PayPal and other apps in 2024 would receive the 1099-K tax form in early 2025 to complete their 2024 tax returns.

For the 2025 tax year, the threshold would step down to $600, unless the IRS makes additional changes."

 

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