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 Backup withholding applies only if you fail to provide "your US tax ID or completing a Certificate of Foreign Status". For most of us that is our SSN, for a business it is the EIN. As @carlsbad2 mentions, that would be reportable on the Schedule D, however you can't take a loss on the sale personal property. |
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Issued: January 16, 2024 Amendments to the PayPal User Agreement
Review the updated PayPal User Agreement
Taxes and information reporting Our fees do not include any taxes, levies, duties or similar governmental assessments of any nature, including, for example, value-added, sales, use or withholding taxes, assessable by any jurisdiction (collectively, “taxes”). It is your responsibility to determine what, if any, taxes apply to the payments you make or receive, and it is solely your responsibility to assess, collect, report and remit the correct taxes to the appropriate authority. PayPal is not responsible for determining whether any taxes apply to your transaction, or for calculating, collecting, reporting or remitting taxes arising from any transaction. You acknowledge that we may make certain reports to tax authorities regarding transactions that we process. For example, PayPal is required to report to the Internal Revenue Service the total amount of payments for goods and services you receive each calendar year into all of your PayPal accounts associated with the same tax identification number once you receive more than (i) $20,000 in payments for good and services and (ii) process more than 200 transactions involving goods or services through those PayPal accounts in the same calendar year (the “Reporting Threshold”). After December 31, 2021, the Reporting Threshold will be reduced to $600 in aggregate payments for goods or services, with no minimum transaction requirement. PayPal is also required to report payments for goods and services to applicable state and local governments. PayPal’s IRS, state, and local reporting obligations are not limited to payments you receive for goods and services transactions. If you receive other types of income (for example, proceeds from the sale of cryptocurrency), these are reportable payments by the aforementioned tax authorities, and PayPal will send you any necessary forms 1099s or 1042-s. These forms will also be transmitted to the relevant tax authority. Taxpayer Identification Number and Withholding Tax PayPal may request that you provide your tax identification number and/or a U.S. tax form such as W-9 or W-8. If you do not provide PayPal the requested information and documentation, you understand and agree that you may be subject to account limitations and federal and state withholding tax at the applicable rates on all US source income payments received. PayPal will send all withholding taxes to the appropriate taxing authorities and cannot refund those amounts. |
