I'm done with PayPal, except for international purchases

[Shark Hunter]

I consider paypal a valuable resource for me.
It gets it done. I use the friends and family for just that.
I use it on a weekly basis.

[oc1]

My wife has a separate PayPal account for her retirement business.  One time she dumped her PayPal balance to the bank account and then had a cancelation and needed to make a huge refund.  I transferred a grand from my PayPal to her's and a few weeks later she transferred it back to me.  We both had to pay income tax on an extra thousand that year.  Live and learn.
-steve

[sdlehr]

.  it would not have been so bad if paypal recorded outgoing money as well as incoming. 

I don't get this. PayPal reports, but you have records that document your outgoing funds.... which go into what you use for your tax return despite what comes in....

[jnd1959]

Ok. I admit it. I'm an accountant. But please don't tell anyone.  Even if your activity is a hobby you still have to report your income if you are a resident of the US.  The key, as has been previously said, is to make sure your expenses at least offset income. This shouldn't be difficult but it does require tracking expenses. It is a surprise to most people that all income is supposed to be reported.  That includes the used dryer you sold last year.  Of course, you likely paid more than the sales price so you have no taxable income but the sale still is supposed to be included. Unfortunately, you can't take the loss on the dryer either. Hope this helps.

[Bryan Young]

It's not the 1099. It's the inability for PayPal to offset expenses, such as postage and PayPal fees in one statement. PayPal reports based on revenue and not income.

[Cortez_Conversions]

It's not the 1099. It's the inability for PayPal to offset expenses, such as postage and PayPal fees in one statement. PayPal reports based on revenue and not income.

Bryan,
You can customize the reports any way you want them. I even use them to pay sales tax.

PayPal reports based on revenue and not income. You can pull that amount from the report and deduct it in your tax returns. It's a cost of business.

I did my 2016 returns in about 5 hours with one report from PayPal.

Tom

[Bryan Young]

Than its no PayPal until I can figure out the reports.

[Keta]

PayPal has been good for me and I do not mind paying them for their service, and do not like getting $ using F&F unless it is not a transaction.

[steelhead_killer]

oops.  noted

[Swami805]

We had a vacation rental with airbnb for many years and used paypal for almost every booking. They started with the 1099's a few years ago. One giant headache after another but it made life easy for our guests. Still better than taking checks and credit cards though and keeping track of who paid what and when. At least it was all in one place. I can imagine for Bryan what a hassle it must be keeping track of everything and then trying to backtrack to figure out all the expenses.

[Black Pearl]

I use QB to keep checking my transactions. I have every PayPal transactions in QB, and QB will take care the rest when time is filing for income tax. I also use PayPal's report and Square's report for sale tax every quarter of year.

[mizmo67]

We have the combo of QuickBooks and the reports, since Paypal does all our transactions for the site inc credit cards.

[Bryan Young]

I guess I'll be purchasing and learning quickbooks shortly.

[sdlehr]

I would suggest you spend an hour or two with someone trained in Quickbooks to help you get set up and get started with the basics, best to be your accountant or bookkeeper. It can be a little intimidating at first, and if you don't set it up right in the beginning you'll have problems in the end exactly when you need them least. Quickbooks actually has a referral service and can refer you to one of these people if you need that. I had my accountant help me set it up, and at the end of the year I just send her my Quickbooks file and I'm done.

[Alto Mare]

The bottom line...uncle sam wants ( 1 ) metal washer and ( 1 ) carbon fiber washer out of each kit you sell.
You'll get used to it, we all do.