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Yes, in order for the client to deduct the amounts paid to your LLC, even if it is through Paypal, they need your E.I.N. so that they can issue you a 1099-Misc. Paypal reporting to the IRS is for information matching purposes only. Example, a business earns $30,000 through Paypal, but they only report $20,000, the IRS will see that an additional $10,000 was paid to Paypal.
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The following applies when a 1099-K has to be issued:
Beginning in January, 2012, payment settlement entities (PSEs) are required by the Housing Assistance Tax Act of 2008 to report on Form 1099-K the following transactions:
If the gross payments made to your company exceed $20,000 and there are more than 200 transactions, the 1099-K issued by Paypal is all that is required. However, if payments made to your company is less than the /$20,000 and there were less than 200 transactions, the payer will issue a 1099-Misc.
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You are welcome. Does the client was the W9 to issue a 1099-misc or simply for their records? If it is only for their records, then it is ok to provide the W9 to them. However, let them know that no 1099-Misc should be issued by them since Paypal will be issuing a 1099-K. The client should already be aware of this, but you might have to reiterate it to them. If the client pays with cash, or via direct deposit, the reporting requirement changes. They will need to issue a 1099-misc.
You can reference the link that I provided regarding the 1099-K.