Taxes on Paypal Income?

Question

I am racking up cash in my PayPal account. But I'm not using it. If I wait until January 1st to transfer it to my bank account can I count it on next year's taxes, rather than this year's?

Answer 1

No.

Paypal is a bank account like any other.  The money is taxed as it is "Constructively Received".  As there nothing preventing you from using the money now, it is taxed in 2008.

Answer 2

Why are you getting this money?  If you are selling items for example, it becomes income to you when the buyer sends the money - it doesn't matter whether you leave it in your paypal account or take it out.  No you can't just report it next year

Answer 3

It depends on how you are getting your money in Paypal

If it is from a company that submits to IRS either Forms 1099 or 1042 that details exactly how much they paid you, then you need to declare it in your taxes that year (even if you had not withdrawn the amount) as the IRS knows how much you earned

For the rest -- well, that's why IRS is going after eBay because IRS wants to know exactly how much eBay sellers are making