My wife has been using my eBay/Paypal account to sell things for a while. We've always paid taxes on any profits. This year, she's sold a bit more, and has taken over 20k in payments, and has also taken over 200 payments.So we're going to get a 1099 k next year, which is fine. As always, we plan to claim the profits minus the deduction anyways, which really isn't much (I believe).

Here's the thing... I was laid off my job in July, and was on unemployment for a couple months. I did get hired (thankfully), and am now back to work.

I know that because the paypal/ebay accounts are in my name, the 1099 from paypal will come in my name. We're concerned about this for obvious reasons: I was on unemployment, but paypal is 1099'ing me "saying" I made money, when I didn't. The last thing i need is to get in trouble.

I did sell a few personal things here and there, but nothing that made a profit... more like a loss (which i'm not going to deduct btw...).

So in the event that we can't get the paypal account/1099 to come in her name... WHAT DO WE/I DO??

If we switch to a paypal business account, and then use the business contact name change by providing a copy of her social security, ID, etc... will that ensure the 1099 comes in her name?

Our bank acct. that is tied to paypal is a joint account. Not sure if that helps...

Thanks in advance,

George

“We're concerned about this for obvious reasons: I was on unemployment, but paypal is 1099'ing me "saying" I made money, when I didn't. The last thing i need is to get in trouble.”---> Did you receive unemployment benefits from EDD? Usually, in most states, you can work up to 20 hours a week and still get your full unemployment check. This 20 hours a week can often give you around $100 or more extra in income and around $400 a month to help make ends meet while you are on unemployment. However, money earned by unemployment benefit recipients must be reported when claiming benefits. The amount of the earned income is deducted from the maximum benefit amount for that week, with any balance of remaining benefits paid to the recipient. Earned income can include money earned through a part-time job, partial employment or self-employment or payments received from a worker's compensation claim, back pay or severance income. One of the issues that some small business owners have with the 1099k form is that if sales tax is charged on a purchase it goes on the credit card transaction and can be counted as revenue. However it is not revenue, it has to be given over to the government. Also they are concerned that if they report credit or debit card transactions on the 1099 k form it may cause the IRS to think that he had double income because normally credit card processors report the income automatically when the transaction takes place. Although, the IRS claims that it is still working out the specific details of the 1099k form and that they will deal with this concern and work on eliminating the problem.So, as long as you received UI bebenfits form EDD, you need to contact your state EDD.
“I did sell a few personal things here and there, but nothing that made a profit... more like a loss (which i'm not going to deduct btw...).”---->Aas you can see, your gross sales amounts will be shown on your Form 1099-K. For example, if you made $30,000.00 in sales and paid $1,900.00 in fees, your Form 1099-K will list $30,000 in gross sales, NOT $28,100 NI. It will be your responsibility to determine the deductibility of fees that you have been charged when you file your tax return. By law, reporting is scheduled to begin in early 2012 for payment card and third-party network transactions that occurred in 2011.
“So in the event that we can't get the paypal account/1099 to come in her name... WHAT DO WE/I DO??”---->As I assume that when you are receiving unemployment benefits, you should report your income on Form 1099K; you are required to disclose all income on Form 1099K. In most states, it is a crime not to. It may be that you will still be eligible for reduced payments during that time, or benefits will be put on hold during your period of employment. However, if you don't report it, the unemployment office will find out from the tax records, and you will be kicked out of the system, required to pay back the money you collected while you were working, and become illegible to ever apply for unemployment again.

“If we switch to a paypal business account, and then use the business contact name change by providing a copy of her social security, ID, etc... will that ensure the 1099 comes in her name? Our bank acct. that is tied to paypal is a joint account. Not sure if that helps...”---->I guess you need to contact the issuer,i.e., PayPAl or and other payment services and credit card merchant account providers, to correct the payee name on Form 1099K to prepare a new Form 1099K. Or you c an ALSO contact an IRS agent in your local area for more information in detail.