Have Tax Questions? Ask a Tax Expert for Answers ASAP
Ye, you have it
The legality here is that the merchant must send out a 1099K when sales reach 20,000 ... they have know way of know, and quite honestly don't CARE if you have accounts at other places
However, I must tell you that you need to report profits regardless
If you're a sole proprietor and this is your only income then it MAY work out that once you look at your income statement you don't have enough income to have to file ... (and sometimes you may want to anyway, to get certainl credits or refund from withholding elsewhere)
in that case (below the filing threshold AND no other reason to file), then what you're talking about makes some sense ... becasue there will be no 1099-K
BUT if you're profitable enough (sales minus expenses) that need to file (or need to for some other reason) then having the 1099 will only serve to document that part of your gross sales
are you still with me here?
Ahh I see you typing... I'll wait
I'm a full time employee and received my 1040 each year. My little sales on Paypal are just something on the side. I really wouldnt want to have to report these 1090k and it would not be a smart business decision to stop selling.
Well again, your assessment is correct, and I't's certainly legal to start using another merchant whenever you like
I certainly dont want to have any problems with the IRS, but if the merchants systems do not generate 1090k below 20k sales, It shoudnt be a problem
allright, thanks. I'll probably look into doing a sole propietorship next year. Thanks for the clarification
NOT reporting any net profit on your side business? Well, I'll leave that one up to you ... I wouldn't be doing my job if I didn't tell you that IRS wants you to report any NET income (again PROFIT) regardless of any 1099s
're welcome ... hopefully having all the facts will help you "see around some corners"
If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better … That's the only way they will pay us here.
HOWEVER, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question.
Yes it helped. cheers