New Tax Reporting for Online Sales – 1099-K

Starting in 2011, the IRS will require the report of PayPal and merchant account sales (over 200 transactions and over $20,000 revenue) through form 1099-K (draft). While this was reported back in March 2010, it was recently noted by Auction Bytes that PayPal is changing their user agreement accordingly. This will affect E-bay and Amazon sellers and other small Web merchants who might not have bothered reporting sales in prior years. This new reporting requirement was buried in the Housing Assistance Tax Act of 2008.