Tax Season

The Joys of Tax Season!

PiggyBank March is upon us, and with it comes many things, including March Madness, St. Patrick’s Day, and, depending on where you live, early signs of Spring.  But March is also important for U.S. businesses and individuals as it’s the last full month before U.S. income tax returns are due on April 15.

Consequently, many of you are already working on your 2012 tax returns or will be soon.  For many of you, that means receiving a 1099 form from eBay to incorporate into your returns.  1099 forms are important entries in tax returns since companies use these forms to report to the IRS (and to you) how much money you made in 2012.  Some of you have been asking questions about 1099s, so to help clarify we thought it might be worthwhile to take a moment and share with you some basics about 1099 forms and tax filing responsibilities.

Fact #1:  How you have chosen to receive payment from ePN determines (1) which part of eBay Inc. provides your 1099 form, and (2) the type of 1099 form you receive.  If you’ve chosen to be paid via direct deposit and are above the dollar threshold (more on that below), ePN is responsible for providing you with a 1099-MISC form.  1099-MISC forms for 2012 were mailed to publishers in January of this year.  However, if you are paid via PayPal, and are above the dollar threshold, then PayPal is responsible for providing you with a 1099-K form.  1099-K forms are available for download on www.paypal.com in your Tax Documents area by following these instructions:  1) Log in to your PayPal account 2) from the History tab, select Tax Documents 3) Select the tax year for which you need documentation, and click Submit.

Fact #2:  Your choice of payment method dramatically changes the thresholds that determine whether or not you receive a 1099 form.  If you are paid via direct deposit, ePN must provide a 1099-MISC form if you’ve been paid at least $600 in 2012.  By contrast, if you’re paid via PayPal, an altogether different IRS threshold applies.  The IRS requires companies like PayPal that process credit and debit card transactions to provide 1099-K forms to those who have received at least 200 separate payments equal or greater than $20,000 in value.  Publishers who don’t meet both of these thresholds for 2012 will not be issued a 1099 form.

If you have further questions on this topic, you can still contact the entity that would provide your 1099 forms:  ePN Customer Support (submit a Contact Us form, or email epn-cs-english@ebay.com) or PayPal Customer Support (click on https://www.paypal.com/us/webapps/helpcenter/home/ or call (888) 221-1161).  Additionally, more information about 1099s can be found on the IRS web site, www.irs.gov.

Remember, regardless of whether you receive a 1099 form or not, publishers have a duty to report their correct income to the IRS.  Although we at eBay cannot offer tax advice, we are happy to help explain the reporting rules and smooth the process wherever possible.

‘Tis the Season of Tax Refunds

Tax return check Think all the big shopping holidays have passed? Think again. While most Americans wouldn’t consider the process of preparing a tax return a festive event, the resulting refunds that millions will receive are likely to boost their spirits … and their spending power.

Tax refunds typically amount to more than a little spare change. Last year, the average refund was more than $3,000.  Not everyone is going to go out and splurge: Unlike the holiday season, tax season is commonly associated with more prudent spending on things like bills and needed home repairs. But even financial advisors tell consumers that it is wise to use at least some of this “found money” on something they need and/or something they want.

Needs

That means it’s a good time to showcase some big-ticket items like major home appliances especially the new energy-efficient models that might pay off on next year’s return; and on technology items such as computers, tablets, printers and scanners, and even hard drives.

Wants

Keep in mind that even prudent consumers are likely to put at least part of their refunds into this category. The trick is to think about the things that aren’t so easily wrapped and left under a tree.  Vacations are one of the most popular uses of tax refunds and with those big-ticket purchases come many smaller ticket purchases associated with planning a trip, from swimwear, to cameras, luggage and comfortable shoes.

In Betweens

There are also many purchases don’t fit exclusively into either of the above categories. Consumers put off buying all kinds of things they genuinely need: a good winter coat, a sectional couch, a new duvet cover, or even a good rug. Receiving an extra check in late winter can make it the perfect time for one of these quasi-practical purchases.

Still wondering how consumers spend their tax refunds? Here’s a tip: Think about some of the things on your own list of wants and needs that weren’t gifted over the holidays. Focus in on one of these categories, or remind your visitors of all the things they really need. Or want.