PayPal Tax ID Requirement
It’s no big deal.
You’re selling happily when all of a sudden you receive notification from PayPal requesting your SSN, ITIN or EIN. It’s explained that due to IRS requirements all United States members must provide a SSN, ITIN or a EIN to continue using PayPal (after certain limits are reached). Paypal explains that, “To comply with the Internal Revenue Service’s (IRS) rules, we ask that you submit your Tax ID number to us as soon as possible.”
What is a Tax ID? A Taxpayer Identification Number (TIN) is an identifying number used for tax purposes in the United States. It is also known as a Federal Taxpayer Identification Number. A TIN may be assigned by the Social Security Administration or by the Internal Revenue Service (IRS).
You’ll get several notifications until finally your account is limited until your provide your Tax ID. This happens around the 175 items sold mark or around $17,000.
Next I’ll explain the different options you have to overcome this limitation. There are those who like to rotate between accounts (we’ll talk about this next) and there are those who want to establish a PayPal business account (I’ll show you how to do this as well). There are other options as well which we’ll also cover.
1. Rotate Accounts
2. Convert to Business Account
Next we’ll discuss how to properly rotate accounts.
