Tax Law Confusion – Amazon, Paypal, Udemy

mercuryIt’s amazing the HUGE companies like Amazon and Paypal issue 1099s with errors. This is what happened this year.  I would rail about it but I really don’t think anyone knows what the tax law is anymore. It changes frequently!

Last year, I got into it with Udemy. They host my Finding Love With Astrology course. They take about 40% commission. It’s an expensive service. But last year, I found myself trying to educate their accounting department about tax law.  That’s silly, don’t you think?

I explained hey should not issue me (or anyone else) a 1099 because they pay via paypal The reason is because paypal issues me a 1099, which includes the money they pay me. If paypal reports the income and Udemy reports it as well, I am taxed twice.

I sent Udemy LINK from the IRS site that explained this, but no one is going to listen to some moron astrologer. They issued me a 1099. I had to pay an accountant to fix the mess.

This year both Amazon and Paypal sent 1099s. A couple weeks later they sent a notice saying the 1099 they sent should be disregarded. Who in their right mind, disregards a 1099?

They said they will issue new, corrected 1099’s in a couple weeks. This is what pisses me off to NO END.  It used to be, tax documents had to be delivered by January 30th. You then had until April 15th to file.

You still have until April 15th to file…regardless of when you get tax documents.  If the forms were wrong the first time, can I be confident they will be correct the second time? I don’t see how.

Yeah, I can file an extension, but guess what? I don’t want to! I want this stuff done! Last year it took me until November to settle my taxes. Who wants to mess with taxes for eleven months? Who needs the stress?

This has had a big impact on my drive to earn money. It’s just too hard on an independent person. If you’re poor, your taxes are a breeze. If you’re rich, you can afford to pay someone to make your worries go away. What’s a person like me to do?

Work less, that’s what. Produce just what I need to survive. Quit trying to expand and get ahead, when things are so badly stacked against me.

If you happen to be an American, and you have a chance to vote for simplified tax laws, I hope you consider it. It just doesn’t make sense for a mom and pop to constantly fight against everyone all the time, for no (good) reason.  When it’s all said and done, there’s not enough left for yourself, to make it worthwhile.

For the record (though this has not been outlined), it appears the reason the 1099s are broken is because they now have to separate international sales. Your income from all sources can’t be reported on one form, which is usual.

I am guessing this, because my bad 1099 is being replaced by two forms, which specify I made $4.52 from overseas. Ha ha ha – great! Wonder what I’ll pay my accountant for messing with this. Is anyone glad or happy?

And Udemy? They did not issue 1099’s this year. I guess they figured it out. And I bet they figured it because they were HEAVILY fined.

I warned them about this by the way. This little dink astrologer told them they they could be charged, $500 or something like that, for every 1099 issued in error.  I sent them a link to the info on the IRS website. But apparently they had to learn the hard way. I am sure they got SLAMMED.

And the instructors?  I bet most of the Udemy instructors paid the double tax last year. People don’t pay attention. They don’t have the time!

This is way beyond Mercury rx.  I like to follow the law. I am following the law, but our laws provide an incredible disincentive to entrepreneurs / small business.

Pluto in Capricorn / death of business. I’ve seen it coming for years.  Tag – Pluto in Capricorn and/or search “black market” on this blog.

I miss common sense. You?

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Tax Law Confusion – Amazon, Paypal, Udemy — 11 Comments

  1. Holy cow, Elsa. I use PayPal, too and income I generate using it is not enough for them to send me a 1099, but I remember them announcing this a couple years ago. I looked it up to see what the income level had to be. Bingo. Very simple. Trust me, I am no tax whiz but this is easy to find out. That’s crazy! I’m glad you caught that! Double taxed is right! It is a nightmare and I am all for simplification of tax laws.

  2. If you’re doing substantial enough business, you should incorporate and then you won’t need to muck about with all these 1099s at all. I incorporated my business as an AZ LLC with taxation as an S-corp many years ago, and I’ve been very satisfied in doing so. Even still, I go through this at least once every couple years where a company’s accountant ignores the exempt box on the W9 I supply them — I guess they don’t believe that I am not a independent contractor, I am a vendor. (I’m just a dumb designer after all! ) Yes there are two sets of taxes, one for you and one for the business, but I rather like being a W2 employee of my own company and on payroll. I was notoriously bad at making quarterly tax payments, so now they just come out of my paycheck. It has to make sense financially to move to this model, but even with the fees I pay for my payroll service, I’m coming out ahead since I don’t have to pay SE on my profits like I would if I was putting everything on a Schedule C.

    • I have incorporated. But if you have X number of transactions of X amount of income on paypal, you are going to get a 1099…oops, I mean you’re going to get TWO 1099s and no warning of such.

      And you’re going to get them at the end of February, yet be expected to file your taxes by April 15th!

      Now if you’re an accountant – this has got to be profitable, but also nightmarish. Because you have a certain number of clients. It would be nice if you could get the super organized people like me, out of the way, before the slackers show up in droves.

      It’s just beyond sickening. I wonder if paypal and Amazon will have to pay fines for the error..and if it was set up to make this be the case.

      • Yeah, they should have had that done by Jan. 31 … that would really screw me up if I had to deal with it, since my corporate taxes are due by March 15th. I do my own taxes and have already got both personal and business ready to mail, so this would drive me batty to have to wait. I looked up the rules, and I mean, the law is pretty simple here — just sounds like a lot of people paid to “get it” are not understanding how to implement it. It’s baffling, really. And I’m sure they won’t pay any fines for the error. Sigh.

  3. I miss common sense. Sorely, painfully miss it.

    And I’ve thought for years that a lot of laws in this country are interpreted in ways that make it hard for the common man to survive with honesty!

  4. ……amen. Could not agree more. I know so many small biz people getting utterly fed up.

    Every year, my city says I didn’t pay my city taxes and threatens me. Every year, I waste time showing them that I did. They get upset and belligerent and hem and hah and threaten some more. Then my accountant calls them and and disappear until next year. He tells me they “do this all the time and probably make extra $$ from people who are scared and confused.” Sick.

  5. 1099s are a headache for both sides. Along with incorrectly filled W-9s. So many errors can crop up on both sides. Not that this excuses them.

    But I know how this happens. People who issue the 1099s generally don’t know anything about taxes. In fact, employees in accounting departments generally don’t know anything about taxes, but they’re supposed to issue the 1099s. It’s considered administrative work. So, the only people who knows anything about taxes are the accounting leadership (who is supposed to check this stuff before it gets mailed out), and the people in the accounting department who work with various taxes.

  6. I am having to pay this year. Usually we get a return. On top of paying for 2013, I got a bill for $650 dollars that is due in 4 weeks! This is for a debt that was cancelled from 2012. I had no idea that this would be considered income. A debt that was cancelled? I also don’t think 4 weeks is enough time to come up with that much money. Thats like almost a mortgage payment worth. They had two years to figure out that I owed them money (to which I had no clue) and now I get less than 4 weeks to pay them. Luckily I had half saved and will eat less for the next 2 weeks so I can pay them.

  7. You have a Cap rising, right? Well, so do I. And when it comes to money and taxes, I always say, Do NOT fuck with a Capricorn Rising! LOL. We know stuff. And if we don’t know stuff, we’ll make it a point to learn stuff. Do NOT fuck with our money.

    • I do have a Cap rising! And while this is not my field, I don’t ignore things that come to my attention. How the Udemy accounting department could not read the passage (which I cut and pasted for them – two sentences) and then check the linked source, is beyond me.

      This crap with Paypal and Amazon, diminishes the companies in the eyes of their associates (me). I am forgiving because to have these two companies lose the plot…there had to be some kind of trick / snare set for them.

      One thing is for sure. It’s not a help to the taxpayer. And it definitely makes a person want to fold in. Bigger business, bigger problems. No thanks!

      Plus you get to be a target. Also, no thanks.

      I’m going to garden and get a pig and a cow. I do not want to get chickens…I like to get them from the store! 🙂

      I’m going to the country, like my grandfather and my parents, before me. Stay until I die, like Henry did and my father is doing. It only makes sense.

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