Metaphysical, Spiritual and Psychic Discussions > Keen.com

RadiantLight

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Zee:
Perhaps wrong wording since it's not legally tax-free, but self imposed tax-free.

PayPal does monitor if you are receiving personal payments for a business account, but you don't have to set up your PayPal as a business account in order to accept payments and link it to a personal account. 

Tax evasion is only illegal if you get caught.  Even people who do pay taxes, still use ways to avoid paying higher amounts of tax, through deductions or not listing all the cash money they have collected, which reduces the amounts of taxes they pay. I'm sure you know how it works.

He would want to avoid paying taxes on such a high amount, because either he didn't plan for it and has to pay the lump sum at the end, which is a pain in the wazoo, or it potentially reduces the money in his pocket.  He would have to pay taxes on the $1800 even though he doesn't receive the full amount, because PayPal takes a percentage from that.  Either way, a bank account linked to PayPal has nothing to do with taxes. You can also link a credit card, which aren't necessarily linked to a bank and they have recently added prepaid cards.

Besides, here are the thresholds in which PayPal issues a 1099K on your account (which means it gets reported). If it's below these thresholds, it doesn't get reported, but both thresholds must be met in order for this to happen:
[Based on your current payment volume PayPal would not issue a 1099K on your account. The current requirements apply to merchants who process over $20,000 and over 200 payments in a calendar year.]

It's possible, he is probably making well over 20k, but I'm sure he has plenty of deductions as well, like his home office, office supplies, landline/mobile phone, internet, Skype, PayPal fees, mileage if he travels to a client, trade shows/appearances, website host, domain name, and whatever else he comes up with.

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