New IRS rule requires sellers to report web purchases
It looks like the IRS will be getting 1099 data in 2011. It will be mandatory for Mastercard/Visa, Paypal, AmEx to report credit card receipts over 20K or 200 transactions a year.
Credit Cards, PayPal to Report Seller
New housing law brings tax implications for U.S. eBay sellers.
by Auctiva.com staff writer – Aug 07, 2008
The Housing and Economy Recovery Act of 2008, which was signed into law on July 30, is of particular importance to online sellers—regardless of their housing situation.
Although much was reported about the bill throughout its year-long path to becoming law, little attention has been given to a provision that will soon require credit card companies to report an annual dollar figure that they process on behalf of each “participating payee” (e.g., eBay seller) to the Internal Revenue Service. The effective date for the reporting requirement is 2011 calendar year receipts.
The law obligates payment settlement entities like VISA and MasterCard to send both the IRS and the “participating payee” the required information in January for the previous year, in a format that is expected to emulate IRS Form 1099. Given the new law’s elaborate definitions of “payment settlement entity,” most, if not all, electronic payment systems will be covered. These will of course include PayPal.
In order to help the IRS associate this data with the correct taxpayer, credit card companies, debit card networks and other electronic payment processors will begin asking their customers for Taxpayer Identification Numbers. Tax IDs will typically take the form of Employer Identification Number or Social Security Number. If an accurate number is not provided, the companies will be required to withhold a whopping 28 percent of receipts.
“The limited burden of this proposal will fall on the merchant card servicing companies (which already have the information to be reported), and not on the businesses who take credit cards as a form of payment,” Treasury Department spokesperson Andrew DeSouze tells Auctiva. “From the sellers’ point of view, this provision will help them to be more compliant by providing an annual statement of their credit card reimbursements so they can have complete information to file their tax returns.”
Not all eBay sellers will be affected by the new requirement, however. Obviously, the dwindling minority who only do business by cash, check and/or money order will experience no impact. But small sellers may also avoid the extra scrutiny, given the law’s minimum threshold: Only payees with more than $20,000 in processed receipts and more than 200 transactions for the year must be reported.
Small business lobbyists fought hard against the mandatory reporting provision, but in the end they lost out to the lure of more tax revenue. “They needed the money, and it was a done deal,” explains Giovanni Coratolo, director of small business policy for the U.S. Chamber of Commerce. “We kind of got lost as a low-priority item in a very high-profile bill.”
Various government agencies have in recent years proffered varying estimates of how much tax revenue is lost by merchants underreporting the type of income this provision is aimed at identifying. The third-party reporting provision will raise an estimated $9.6 billion over 10 years by encouraging merchants to report their income accurately to the IRS, according to the Senate Finance Committee. According to the Joint Committee on Taxation, this provision should result in $608 million in taxes in 2012 alone.
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Firefox Optimization Tips
Type in “about:config” into the address bar and press enter, and agree to be careful.
All Firefox users should have settings like these:
network.http.pipelining: true
network.http.proxy.pipelining: true
network.http.pipelining.maxrequests: 8
content.notify.backoffcount: 5
plugin.expose_full_path: true
ui.submenuDelay: 0
If you have: Fast Computer, Fast Connection
content.interrupt.parsing: true
content.max.tokenizing.time: 2250000
content.notify.interval: 750000
content.notify.ontimer: true
content.switch.threshold: 750000
nglayout.initialpaint.delay: 0
network.http.max-connections: 48
network.http.max-connections-per-server: 16
network.http.max-persistent-connections-per-proxy: 16
network.http.max-persistent-connections-per-server: 8
browser.cache.memory.capacity: 65536
Take note – Firefox allocates 4096 KB of memory by default. For this configuration, it has roughly 65MB (seen on the last line). This can be changed according to use.
If you have: Fast Computer, Slower Connection
content.max.tokenizing.time: 2250000
content.notify.interval: 750000
content.notify.ontimer: true
content.switch.threshold: 750000
network.http.max-connections: 48
network.http.max-connections-per-server: 16
network.http.max-persistent-connections-per-proxy: 16
network.http.max-persistent-connections-per-server: 8
nglayout.initialpaint.delay: 0
browser.cache.memory.capacity: 65536
If you have: Fast Computer, Slow Connection
browser.xul.error_pages.enabled: true
content.interrupt.parsing: true
content.max.tokenizing.time: 3000000
content.maxtextrun: 8191
content.notify.interval: 750000
content.notify.ontimer: true
content.switch.threshold: 750000
network.http.max-connections: 32
network.http.max-connections-per-server: 8
network.http.max-persistent-connections-per-proxy: 8
network.http.max-persistent-connections-per-server: 4
nglayout.initialpaint.delay: 0
browser.cache.memory.capacity: 65536
If you have: Slow Computer, Fast Connection
content.max.tokenizing.time: 3000000
content.notify.backoffcount: 5
content.notify.interval: 1000000
content.notify.ontimer: true
content.switch.threshold: 1000000
content.maxtextrun: 4095
nglayout.initialpaint.delay: 1000
network.http.max-connections: 48
network.http.max-connections-per-server: 16
network.http.max-persistent-connections-per-proxy: 16
network.http.max-persistent-connections-per-server: 8
dom.disable_window_status_change: true
If you have: Slow Computer, Slow Connection
content.max.tokenizing.time: 2250000
content.notify.interval: 750000
content.notify.ontimer: true
content.switch.threshold: 750000
nglayout.initialpaint.delay: 750
network.http.max-connections: 32
network.http.max-connections-per-server: 8
network.http.max-persistent-connections-per-proxy: 8
network.http.max-persistent-connections-per-server: 4
dom.disable_window_status_change: true
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Your host may be coming for you!
When signing up for a host, many times you pay either with a credit card, paypal, or maybe automatic withdrawal from your bank. These are convenient, saving time on renewals and keeping track of all your different accounts.
Of course, you pay for convenience. One very prevalent consequence of using any type of automatic payment method, is the tendency of some hosts to bill whether you want hosting or not.
Automatic Payments.
In a previous post, I discussed my discovery of the authorization code. Let’s say you pay for hosting with a debit or credit card. There is a card number and a 3/4 digit number on the back of the card. Basically, once you give a host (or any merchant for that matter) your credit card information with that 3/4 digit code on the back, they are able to charge you indefinitey. It doesn’t matter if you cancel the card and get a new one.
Keep your money safe.
Knowing about the authorization code, I have avoided using credit/debit cards on the web. All my transactions go through Paypal. For added a protection, I do not link Paypal to my bank account. And, there is only enough in there to handle monthly expenses.
Well, with all these precautions, I no longer have the thousand dollar issues that were common in the past. However, a new problem has arisen. The arrival of the collection agency.
A new strategy.
Once hosts realized that they could no longer deduct from my accounts without notifying me or providing service, they decided to send collection agencies after me. It is this kind of behavior that shows the kind of disreputable operation that forced me to leave them in the first place.
It is probably the tough economic times combined with very lax banking practices that encourage this kind of behavior. The banks are ever so anxious to rack up overdraft fees, penalties, interest charges, over-balance surcharges, etc. And, you have hosts that are probably suffering from the slowing business.
It’s coming.
Be aware! If you do automatic payments and decide to cancel hosting, don’t be surprised if they send a collection agency after you!
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Autorenewal and Paypal subscriptions
I despise this tactic (automatic renewals without notifying the customer), so it was refreshing to learn I was not the only victim of this.
From namepros.com
…
I got a Paypal receipt today for $99.99 from a company I didn’t recognize. My first thought was a scam or I accidentally signed up for something. However, I noticed the subject line called it a “subscription” payment.
I went to Paypal and checked my subscriptions. To my surprise, I had several small recurring monthly payments scheduled. There were some monthly charges for services I knew about and wanted, but there were also a couple of services I had subscribed to a year or more ago that I’d forgotten and no longer wanted…like stupidvideos.com and freewebs.com. I don’t know how I missed these, but with all the Paypal usage domainers have, it’s pretty easy to let something slip by.
It appears the $99.99 charge was billed once per year from ValueAddons.com. I had written to them to cancel my account a couple of years ago and forgot all about them. I didn’t realize I needed to cancel the payments in Paypal, too.
I encourage everyone to check their accounts asap…and check them from many years back, as subscriptions only show up by including the year they were created.
Here’s how to check and cancel unwanted subscriptions:
1. Log in to your PayPal account.
2. Click “History” under “My Account” at the top of the page.
3. Click “Basic Search” from the “History” drop down
4. Click “Subscriptions” from the “Show” drop-down menu.
5. Check the “From” box and change the date back to a few years ago.
To find subscriptions, you must include the year it was created. If you have a subscription from four years ago, and only search three years back, it won’t show. I had one from over three years ago, so be sure and set the “from” date to several years ago. Click “Search”.
6.. If you have (or had) any auto-paying subscriptions, scroll down a bit.
They will be listed on the page under the date selection tool.
7. Any current subscriptions will be labeled “Active”.
8. If active, click on “Details”.
That will show you who/where you are paying.
9. If you want to cancel the payments, click “Cancel Subscription” at the bottom of the page.
10. Click “Cancel Subscription” again on the next page.
11. ”This subscription has been cancelled” will appear at the top of the next page.
That’s it…no more automatic payments will be deducted from your PayPal account. Now you have more money to buy domains . . . .
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Neat wordpress trick
Extract all the emails from the comments in a wordpress blog.
I haven’t tried this yet but saw it on a webmaster forum.
<?
$db_host = "localhost";
$db_user = "username";
$db_password = "password";
$db_name = "database";
$connect=mysql_connect($db_host,$db_user,$db_password) or die(mysql_error());
$db=mysql_select_db($db_name, $connect) or die(mysql_error());
$result=mysql_query("select comment_author_email from wp_comments");
while($row=@mysql_fetch_assoc($result))
{
$email=$row[comment_author_email];
echo $email;
}
?>
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