Escrow doesn't send a 1099?

[The Rover]

Not looking for tax advice - just a general question. I was under the impression that if your business pays out over $600 in any given year to an individual or business, that you are required by the irs to send your payees a 1099-MISC. After speaking with Escrow.com, they said that they do not send a 1099 to their payees, which I thought was strange. Can anyone shed any incite as to why they are not required, even though they are a U.S company?

 

[Kate]

Escrow is a third party payment processor, but they are not the payer (the source of funds).

 

[lothos]

You did not earn any income from services that you provided to escrow.com.

 

[iowadawg]

1099s are sent only by companies, banks, etc only if there is some income from them to the taxpayer.
There is no income, gains or losses, for using a third party like escrow.

 

[johname]

It's not hard to figure out how much and what you sold on escrow dot com during 2012

 

[bmugford]

A 1099 does not apply to domain sales. It applies to things like parking revenue that are income.

Domains have an underlying cost to acquire.

Just because you sell a domain for $10,000 does not mean you made $10K income, in fact you could have lost money depending what the initial cost was.

Brad

 

[johname]

Yes this is why your 1099 from your stock trading account isn't just "sells" lol you need the buys too


You should have the initial cost info of all your names.

And worry about this earlier than April 8th

 

[The Rover]

It's not hard to figure out how much and what you sold on escrow dot com during 2012

I agree, it's certainly simple to see what you have sold via Escrow so that you can report it on your taxes, however, that wasn't my concern. I was really just trying to get clarification as to what excludes Escrow.com from having to send out a 1099.

Escrow is a third party payment processor, but they are not the payer (the source of funds).

As for where the "source" of income originates, I'm not sure if that's what really clarifies the issue. If so, then why would affiliate companies and adsense etc, be required to send out 1099 forms to affiliates, since technically speaking the source of income wasn't directly from Google Adsense, rather it was from their initial advertisers.

What about the law that requires payment processors to send out a 1099-K to anyone earning over 20k or anyone who processes over 200 transactions?

Thanks for all the replies.

 

[mjnels]

What about the law that requires payment processors to send out a 1099-K to anyone earning over 20k or anyone who processes over 200 transactions?

yes.. they are supposed to send one out.

but its a double threshold.. you need to get paid 20k AND process over 200 transactions before theyre required to send one out.

so if you get paid $50,000 but its only 150 transactions you wont get one.

 

[The Rover]

yes.. they are supposed to send one out.

but its a double threshold.. you need to get paid 20k AND process over 200 transactions before theyre required to send one out.

so if you get paid $50,000 but its only 150 transactions you wont get one.

That's my point. So in reality, Escrow.com isn't exactly excluded in such cases, correct? Aren't they required by law to send one if you exceed those thresholds?

 

[johname]

since technically speaking the source of income wasn't directly from Google Adsense, rather it was from their initial advertisers.

this is way over thinking it, its income from your partner google.

What about the law that requires payment processors to send out a 1099-K to anyone earning over 20k or anyone who processes over 200 transactions?

Thanks for all the replies.

First is money laundrying, terroist money trial, and you look at the big money first when finding tax cheats.

The second 200 transaction. Is simple if your doing 200 transactions a year on escrow dot com your a business! And if your a business the gov wants to know about it.


Remember people sell things like their chevy luv pickup truck through escrow dot com and the dont want to be taxed twice nor hassled by it.

 

[mjnels]

That's my point. So in reality, Escrow.com isn't exactly excluded in such cases, correct? Aren't they required by law to send one if you exceed those thresholds?

yes any third party payment processor has to send one after you meet both thresholds..

1099-K is brand new and the employees you talked to probably dont know what it is... i'd imagine the system that mails it out is automated but yes, any third party payment processor is required to send you one (also, after the threshold the info is also sent to the government)

 

[The Rover]

yes..

1099-K is brand new and the employees you talked to probably dont know what it is... i'd imagine the system that mails it out is automated but yes, any third party payment processor is required to send you one (also, after the threshold the info is also sent to the government)

I'm surprised how many people are unaware of this. Thanks again, for clarifying.

 

[johname]

Take 10k in cash through the airport or to your bank teller and there a bunch of these rules and declarations.

I am switching all my money to bitcoins!

 

[The Rover]

Take 10k in cash through the airport or to your bank teller and there a bunch of these rules and declarations.

I am switching all my money to bitcoins!

Perhaps I'm misunderstanding your posts, however, I have no idea what you're going on about. As I've stated above, obviously any and all income you receive through any payment processor, must be reported, regardless of the amount. Naturally you will report your losses and expenses, but you're required to report any and all income. I also think we have also now clarified that if you receive over 20k and process over 200 transactions, that the payment processor is indeed required by law to send a 1099.

 

[cdboard]

are there any domainers out there who send escrow.com a 1099?

 

[The Rover]

are there any domainers out there who send escrow.com a 1099?

If you meet those thresholds, then Escrow.com (the third party processor) would be the one sending you the form, not the other way around. At least they are required to.

 

[mjnels]

Take 10k in cash through the airport or to your bank teller and there a bunch of these rules and declarations.

I am switching all my money to bitcoins!

the airport thing is only for flying into or out of the country... you can take over 10k domestically and aint required to say a thing.

 

[JB Lions]

I'm sure whatever Escrow told you is probably right, since they probably have an accountant that they get their info from.

I read something about this awhile back, something along the lines of they're not paying you from their funds, but somebody else's escrow funds.

In the end, talk to an accountant, not sure we have any posting here at this forum. They're going to be more up to speed than anybody in this thread.

 

[mjnels]

I'm sure whatever Escrow told you is probably right, since they probably have an accountant that they get their info from.

I read something about this awhile back, something along the lines of they're not paying you from their funds, but somebody else's escrow funds.

well now form 1099-k exists so depending how long ago you heard this it may have been true at the time but isnt anymore if you meet the payment thresholds.

 

[JB Lions]

well now form 1099-k exists so depending how long ago you heard this it may have been true at the time but isnt anymore if you meet the payment thresholds.

I guess you must know more about accounting/taxes than Escrow's accountant. From what I've read and what's been mentioned above, it is 20k and 200 transactions, which would eliminate 99% of this forum. In the end, talk to an accountant to be sure.

 

[mjnels]

I guess you must know more about accounting/taxes than Escrow's accountant. Are you certified?

:lol:

he's not asking for tax advice. this is a law that any third party payment processor is required to follow. its pretty cut and dry..

 

[JB Lions]

:lol:

he's not asking for tax advice. this is a law that any third party payment processor is required to follow. its pretty cut and dry..

Tax Forms not tax advice. Ok.

It's not so cut and dry, if you were an accountant you would know that, or somebody who could at least Google.

There are some exceptions you can read about - http://www.irs.gov/instructions/i1099k/ar02.html#d0e191

The ones about foreign payees, outside accounts etc.

 

[mjnels]

Tax Forms not tax advice. Ok.

It's not so cut and dry, if you were an accountant you would know that, or somebody who could at least Google.

There are some exceptions you can read about - http://www.irs.gov/instructions/i1099k/ar02.html#d0e191

The ones about foreign payees, outside accounts etc.

i dont think he'd care if any of this applied. of course people living outside the U.S. wont get this..

also, why are you so upset? this aint the gTLD thread danielson..

 

[The Rover]

I guess you must know more about accounting/taxes than Escrow's accountant. From what I've read and what's been mentioned above, it is 20k and 200 transactions, which would eliminate 99% of this forum. In the end, talk to an accountant to be sure.

I wouldn't be that quick to assume that such a threshold would be that rare. I know 5 people off the top of my head who use paypal as their main third party processor who far surpass this threshold, in which case they received a 1099 from paypal. 200 transactions and 20k in a fiscal year isn't that difficult to achieve if you have a full time web business, whether it's selling domains, products or services.