Here in New York, how do I go about paying taxes on PayPal? For example, suppose I start out a month with a PayPal balance of $0. The first week of the month, I earn $500 selling advertising space on DaniWeb which goes into my PayPal balance. I never withdraw anything. The third week of the month, I spend $150 purchasing ad space on another website, which comes directly from my PayPal balance. At the end of the month, I direct deposit the $350 I have into my bank account. According to the U.S. government, did I just make $350? Or did I make $500? I only ever saw $350 of it. Does a PayPal balance count as real money or does it not count as real money until it is in the form of a check or ends up in your bank? I have heard people consider a PayPal balance simply a form of online credit that is associated strictly with the paypal.com service. In other words, it isn't real money until you withdraw from PayPal.
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Jump to PostI'm certainly no tax person, but if you spent the money on web hosting, then it was real money, was it not? You can't spend it if you don't have it, right? Anyway, you can claim the hosting expense as an expense so it all comes out in the wash. …
Jump to PostWell, technically there is no actual "money" involved in PayPal accounts. PayPal is just a running total of how much one account was given from another and vice versa. It isn't until someone "cashes out" that money is actually "made and moved." PayPal is not a bank. Thus, their accounts …
Jump to PostAlright, my father is a Certified Public Accountant in New York State. While he doesn't have time to write a response, this is his view on it:
Once the money hits your paypal account, it's your income. It doesn't matter how long you wait to withdraw it, or even …
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