Do you have to pay taxes on payments made to yourself through an online service?

[jacques001]

What is the name of your state (only U.S. law)? MA

A variety of internet companies allow users to pay others for their services. These include PayPal, Venmo, and Square, to name others.

When a merchant uses these services to receive payment (e.g. a private trainer), they are required to report the income and pay taxes on it.

However, suppose the merchant and the user are the same individual, and suppose that the payment processor doesn't explicitly forbid users paying themselves.

Would a user owe any taxes on a payment that they made to ultimately to themselves?

The IRS bullets here seem to assume that people only pay themselves through self employment or their own business...: https://www.irs.gov/businesses/small-businesses-self-employed/paying-yourself

 

[quincy]

What is the name of your state (only U.S. law)? MA

A variety of internet companies allow users to pay others for their services. These include PayPal, Venmo, and Square, to name others.

When a merchant uses these services to receive payment (e.g. a private trainer), they are required to report the income and pay taxes on it.

However, suppose the merchant and the user are the same individual, and suppose that the payment processor doesn't explicitly forbid users paying themselves.

Would a user owe any taxes on a payment that they made to ultimately to themselves?

The IRS bullets here seem to assume that people only pay themselves through self employment or their own business...: https://www.irs.gov/businesses/small-businesses-self-employed/paying-yourself

You are receiving money for a provided service, correct?

 

[LdiJ]

What is the name of your state (only U.S. law)? MA

A variety of internet companies allow users to pay others for their services. These include PayPal, Venmo, and Square, to name others.

When a merchant uses these services to receive payment (e.g. a private trainer), they are required to report the income and pay taxes on it.

However, suppose the merchant and the user are the same individual, and suppose that the payment processor doesn't explicitly forbid users paying themselves.

Would a user owe any taxes on a payment that they made to ultimately to themselves?

The IRS bullets here seem to assume that people only pay themselves through self employment or their own business...: https://www.irs.gov/businesses/small-businesses-self-employed/paying-yourself

I am sorry but since that really doesn't make sense to me, you will need to give me a better example of what you are talking about, before I can comment on any tax ramifications.

 

[FlyingRon]

The payment method has no bearing on tax. If you are receiving money for work you do, it's taxable.
It makes no difference whether or not you trigger the thresholds for the payment processor to make 1099 reports.