AptClasses posted on December 02, 2011 09:30
This guest post is brought to you by Outright.com, the easiest way to track your business finances online.At Outright.com, we know how busy crafty people like you are. But we need to bother you for at least a second, as we have an important announcement to share.Coming in early 2012, things are going to be a little different when it comes to your taxes. That’s because PayPal is sending out the brand new “PayPal 1099” for this upcoming tax season.What’s that you may ask? The PayPal 1099 tracks all the money you made that passed through PayPal in the previous year and sends your this information...this same info is also sent to the IRS. You use the 1099 like any other tax document when figuring out what you owe/are owed in taxes at the end of the year. If you’ve ever worked as a contractor, you’re probably familiar with receiving a form 1099 from your client at the end of the year. This document is similar, only now, due to new laws, payment processors like PayPal are also required to send them out.Is It Complicated?Not at all! Some online sellers are getting worried their taxes will be extra difficult in 2012. And we understand – like we said, you’re busy, and complications like this just means you have less time for making and selling your product.But don’t fret. For one, you may not even get the PayPal 1099. For the 2012 tax season, they’ve reserved it strictly for certain sellers. Basically, it’s anyone who makes online selling their career. If you made over $20,000 with over 200 separate transactions, then you’ll get the PayPal 1099. If not, it’s business as usual at tax time!It's Only RevenueNow, the 1099 doesn’t cover everything you need for your taxes. The info they will report is strictly revenue. If you made $25,000 in 2011 through PayPal, then they will send you a 1099 with $25,000 reported on it.So obviously this isn’t a complete view of your tax information. You still need to report all business expenses when you figure out your taxes. If not, you’ll end up paying a boatload of money to the IRS when you really shouldn’t be.That’s why we can’t stress enough the importance of tracking all your business deposits and expenses. Every receipt, every little purchase should be written down in preparation of this new tax document. We’re probably “preaching to the choir,” though, as you’re probably already doing this! But it’s doubly important now that the IRS will get your business info ahead of time.So try to remain calm next year when that ominous looking piece of paper comes in the mail. Just remember if you ever have any questions, Outright is here to help!Worried about tracking your expenses? Outright automatically imports your financial information from your bank account, PayPal, Etsy and more. Sign up today for free Outright.com account through tax season 2012!
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