Do you have to pay Taxes for paypal income?

**moemoneyman** · 12-06-2007, 12:43 PM

Let me know please. Does paypal report your income to the IRS?

**Felix** · 12-06-2007, 12:51 PM

Let me know please. Does paypal report your income to the IRS?[/b]

Yes you should delecare all income you get via paypal that is over a set amount.

**moemoneyman** · 12-06-2007, 12:53 PM

Yes you should delecare all income you get via paypal that is over a set amount.[/b]

Who actually does that? I heard paypal doesn't report anything to the IRS.

Could you tell me what the process is? Should I transfer all the funds to my bank account and then count that as a big income or should i report each individual transaction. What form do I have to fill?

**Psy** · 12-06-2007, 01:06 PM

It's the same thing as a waitress reporting her tips to the IRS. You're on the honor system, if you don't do it once, then they'll probably never find out. Besides, I don't believe that they mandated online virtual item taxes. Also, if you buy something out of state online I know that you don't have to pay taxes for it, but if you buy an item online and it is shipped from within your state, you'll have to pay a salestax.

**moemoneyman** · 12-06-2007, 01:30 PM

It's the same thing as a waitress reporting her tips to the IRS. You're on the honor system, if you don't do it once, then they'll probably never find out. Besides, I don't believe that they mandated online virtual item taxes. Also, if you buy something out of state online I know that you don't have to pay taxes for it, but if you buy an item online and it is shipped from within your state, you'll have to pay a salestax.[/b]

Considering I follow the honor system, what is the process? Do I have to report each individual transaction? How do I report foreign transaction which were converted to the US currency with paypal? What form do I have to fill out?

I don't want to evade taxes considering my net income with paypal was $37, 700 this year.

**Psy** · 12-06-2007, 01:38 PM

You have to report each individual one. You must also have an employer or formal business. So if you want to declare a business, that would be a different question. Also, who did you receive that money from? People from out of country? What did you sell, virtual items? There's no tax on Virtual Items yet. There was mention of it a while back, but it is not law.

**moemoneyman** · 12-06-2007, 01:42 PM

You have to report each individual one. You must also have an employer or formal business. So if you want to declare a business, that would be a different question. Also, who did you receive that money from? People from out of country? What did you sell, virtual items? There's no tax on Virtual Items yet. There was mention of it a while back, but it is not law.[/b]

ARE YOU FUCKING SURE?

I don't want to get raped by Bubba.

**Psy** · 12-06-2007, 01:50 PM

http://www.news.com/IRS-taxation-of-online...html?tag=st.num

NEW YORK--If you are a hard-core player of virtual worlds like World of Warcraft, Second Life, EverQuest or There, IRS form 1099 may someday soon take on a new meaning for you.[/b]

I looked it up, apparently in 2008 you'll have to start paying taxes.

Here is the 1099 form:
http://www.irs.gov/pub/irs-pdf/f1099msc.pdf

**moemoneyman** · 12-06-2007, 02:02 PM

http://www.news.com/IRS-taxation-of-online...html?tag=st.num
I looked it up, apparently in 2008 you'll have to start paying taxes.

Here is the 1099 form:
http://www.irs.gov/pub/irs-pdf/f1099msc.pdf[/b]

How do you prove to the IRS if you were selling virtual items.

**Psy** · 12-06-2007, 02:07 PM

You document each one by taking screenshots and saving the convos you had with each person. If you don't have that, then you can't prove that you sold virtual items. I suppose that a bank statement could even be proof enough though.

I'd like to see them try to convict someone for playing a game and selling what they accumulated. It would be a frivolous lawsuit, on the government's part.

**moemoneyman** · 12-06-2007, 02:09 PM

You document each one by taking screenshots, getting their address, and saving the convos you had with each person. If you don't have that, then you can't prove that you sold virtual items. I suppose that a bank statement could even be proof though.[/b]

http://www.irs.gov/help/article/0,,id=96730,00.html

Call them Psy ask them. Take one for the team. I would call them, but if they ask for any personal information I am screwed. The answer that will be given to you will decide the future of paypal trades.

Make it official. I too read many websites, but there are always contradictary statements like "you don't have to pay taxes", "you do have to pay taxes" etc etc.

**Psy** · 12-06-2007, 02:16 PM

But... I want you to get raped...

I would call them, but some ****** stole my cell phone battery. I blame affirmative action, they helped them get into my school and gave them scholarships so that they could do that.

Yay for badword filter.

On second thought, I may call them using someone else's cell phone. If someone gets redflagged, I don't want it to be me.