The other wonderful thing is if your buy & sell Cues as a side line business you get to pay Social Securitry on profits at about 18% because you get to pay both side of social security. It called self employment tax.
New tax laws may effect cue sellers.
- Thread starter middleofnowhere
- Start date
Wrong forget the form you fill out when employeed at new job, has to do withholding. People sometimes lie about number of exemptions.
W-4 Form.
That's why I specified itemizing. If you take the standard deduction, you're eating cue sales as income.
It is the death of PayPal G&S for hobbyists
Uncle Sam wants nothing to do with most businesses, until they operate in Black. Then you have a silent partner taking profit they call taxes.
Walmart counter is gonna be busy with Walmart pay
If you file Schedule C, can't you claim 100% of valid expenses, such as cost of good sold?
That is 110% correct, just have documentation, and simple ledger to back up numbers.
Thing like auto expense, travel, meals, lodging, postage, packing material, business related are deductible.
If you're itemizing, sure. You can't take the standard deduction and also itemize.
All the financial wizards on AZB, like mr rodeo clown there, will clearly do well.
The average person at the pool hall is not doing this though.
Again, this doesn't effect businesses, but it effects people who are buying and selling cues all year to try out new things
SlateMan
Registered
Incorrect! The itemization vs standard deduction deals with general items that are deductible. The question was, "IF you file a schedule C". On the schedule C, you deduct your expenses that relate to your income for the schedule C business. This determines the total income for the schedule C (Business income less business expenses).
I've taken a standard deduction in years past, but I have rental income. The rental expenses are deducted against the rental income. (Not a schedule C, but similar concept).
If you are buying and selling, you just need to file the Schedule C and deduct the cost of goods purchased vs sold, shipping expenses etc. It's a burden because it is more paperwork. It does not have to be a tax burden because you purchased a carbon fiber via a credit card and did not like it and sold it with a paypal payment. Your 1099 from Paypal will get tied to the schedule c. Just don't be stupid with your deductions.
What's the over/under on pool players getting audited this year?
A fully itemized return coupled with a Schedule C is expected.
Your last sentence is the downfall of many people using Schedule C
12 minutes in TurboTax.
SlateMan
Registered
Very small. The amounts are minuscule for most people.
A properly documented Schedule C is a little more work than that, depending. For example, in order to deduct car expenses, I have to keep a contemporaneous (done at the time of the action) log of my vehicle use, including mileage for each trip. I've never been audited but I have the logs ready. It's not hard to do, but there are lots of little things. Credit cards are my primary source of expense documentation. Most of my lesson income is cash which is also recorded in my log.
I've done one for 20 years. I bet my situation is closer to the cue makers, with more like 200 or 300 transactions per year and very easy to do.
As you say, it's a lot easier if you keep good records along the way.
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dirtvictim
Ignore the entitled they haven't earned respect
This only makes it less incentivized for the majority of individuals that are only selling previously taxed items not for profit and will slow the normal process of used goods feeding into the marketplace and without a doubt will push prices up thereby extending the current economic trends of inflation.
They were required to pay taxes on the sale before
its just a reporting of a transaction. not a reporting of income. so no 1099 is issued.
if you made no money on the sale you dont have to do anything. if you made money you are supposed to report it as in any transaction you made money off of.
if its a business you are doing then the amount of your transactions will raise a red flag and you may get a letter.
if you made no money on the sale you dont have to do anything. if you made money you are supposed to report it as in any transaction you made money off of.
if its a business you are doing then the amount of your transactions will raise a red flag and you may get a letter.
See here:
Venmo, PayPal and Zelle must report $600+ in transactions to IRS
Starting Jan. 1, mobile money apps like Venmo, PayPal and Cash App must report annual commercial transactions of $600 or more to the Internal Revenue Service.
www.nbcnews.com
it would seem that most of those transactions for cues and things fall under goods and services and not commercial sales.
so no 1099 for them.
in any case it can create turmoil for those that do only small transactions. but will be easy to work with as they get 1099's they just have to deduct cost of goods sold from the total when filing.
those that are actually doing it as a business need to start acting like one.
so no 1099 for them.
in any case it can create turmoil for those that do only small transactions. but will be easy to work with as they get 1099's they just have to deduct cost of goods sold from the total when filing.
those that are actually doing it as a business need to start acting like one.
SlateMan
Registered
Great advice. I once had an attorney who did not keep logs. He guestimated. The IRS opened up a can of whoop on him. Luckily, there was a database of his calendar with all of his court cases. I was able to reconstruct his mileage to within about 20 miles of his guess. The IRS agent didn't believe that would be enough evidence until I showed him there was a federal record of the attorney in court on those days at those times. He randomly sampled about 10 of the records and found all to be spot on. [The attorney was an honest guy, he worked six days a week and only used his car for work, so he had taken the mileage back and forth to his house and subtracted those miles from his odometer at the beg of the year to determine how much he drove].
The moral of the story is to keep records!