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Form 1099-MISC Update (new for 2011 tax year, IRS section 6050W)

submitted 122 days ago by YanBz in "Buxr Website / Contests"

It appears those of you who earned over $600 in prizes will not be receiving 1099-MISC this year from Buxr. IRS has changed regulations in such a way that payments made via Paypal and gift cards have now been excluded from 1099-MISC reporting.

You might however receive a 1099-K form from Paypal and/or Amazon instead (which you then use in your tax return). The changes affect Internal Revenue Code Section 6050W and have been enacted since January, 2011. Here are sources to go for additional information:

Overview of changes at IRS:
http://www.irs.gov/govt/fslg/a.....94,00.html
Complete text of the rules at IRS:
http://www.irs.gov/pub/irs-utl.....al_reg.pdf
Paypal FAQ about 6050W:
https://cms.paypal.com/us/cgi-.....s/IRS6050W
Thomson Reuters newsletter:
http://onesource.thomsonreuter.....-article6/
Intuit Payroll Support about the change:
http://payroll.intuit.com/support/kb/2001238.html

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Comments

141364

master

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Posted by bemicmom 121 days ago
[reply] 1 0

So now the Total amount should be over $20000 total earnings in PayPal . Am I right?

admin

Posted by YanBz 121 days ago

[reply]

The new regulations stipulate that two conditions must be met in order for the "third party settlement" organization (which is what I believe Paypal and Amazon are in this case) to be required to report the transactions as 1099-K:

1. The transactions total amount exceeds $20,000, and
2. Aggregate number transactions exceeds 200

professor

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Posted by onkarkulkarni 121 days ago
[reply] 2 0

wow, that's a welcome rule change from the IRS!

master

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Posted by bemicmom 121 days ago
[reply] 1 0

That's a great News...party time.

professor

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Posted by onkarkulkarni 121 days ago

[reply]

So it basically means we can earn upto $19999 within a year and not report it?

learner

Posted by mdoneil 117 days ago

[reply]

No, you have to report it, however paypal or ebay or whomever don't have to 1099 you.

FYou must report all income.

141386

deity

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Posted by pablos17 121 days ago
[reply] 1 0

Woo hoo!
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professor

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Posted by clover 121 days ago
[reply] 1 0

Thanks Yan! That made my day and it has been a rough one.
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professor

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Posted by psplove 121 days ago [reply] 0 0

Sounds great. Thanks for good news.

admin

Posted by YanBz 117 days ago

[reply]

I want to clarify my post, as it seems to be misinterpreted. Even though starting with this year we don't send out 1099's, as mdoneil correctly noted above, you still need to report your extra income on your tax return. This post was in no way meant to suggest otherwise.

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