Heads up to anyone who does a lot of paying and receiving through Paypal. A new law (as of a few years ago) says you cant send 1099-Misc forms to authors etc. who are paid through Paypal. The idea, of course, is that while a lot of smaller folks receiving small amounts might not report what they made, anyone with 20k in transactions and 200 transactions will get this form, and will HAVE to report their income. The problem? Not everyone reads instructions (can you believe it?) I have at least one big retailer who pays us only via Paypal. Quarterly. They ALSO sent a 1099 for the money they paid. They were not supposed to. Now the IRS thinks I was paid that money twice. On top of that, I have to show them that I PAID a huge amount of royalties via PAYPAL because currently - since they did not let me report via 1099 - they have no record that I paid said money. REALLY bad planning on their part, but of course, they dont care. Tax folks are helping me straighten it out, but Id say this is the best argument Ive ever seen for never using Paypal.
Posted on: Fri, 22 Aug 2014 15:16:49 +0000
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