Is there any? What is it?

I was going to do a little work/commission for a friend and he wanted to just pay with paypal, so I went and got one. The income will be $200.

ScottGem

And your questionn is????

pat61

Is there any income tax on paypal for personal use?If so, What is it?

ScottGem

ANY income you receive is taxable. Paypal doesn't provide you with income unless you opt for an interest paying account. How you get paid for the work you do is immaterial to its taxability.

Anyone who pays you for services rendered is required to submit a 1099 if the income is over $600. The income listed on the 1099 must be reported on your tax return,

pat61

So, any income under $600 is not under the 1099? And that means that you don't fill out the form? Do you know what % it takes?

ScottGem

No, that's not what I said. I said that a person or company is REQUIREd to report fees paid to a contractor when those fees exceed $600. A 1099 can be filed for a lesser amount, especially if the company wants to claim the amount as an expense. But whether a 1099 is issued or not, you are required to report all earnings. Earnings will then be added to your total annual earnings for determining tax liability.

Fr_Chuck

how they pay you, cash, check, or paypal, has nothing to do with the tax status. Any income has or should be reported. The person paying has to provide you with a 1099 if it is over 600, but even if under you are suppose to report it

MukatA

Yes, it is your self employed or independent contractor income. You must report it on the tax return. It is reported on schedule C or C-EZ (Form 1040).