Any tax advice for a newbie?

[wombat]

whats the paypal limit or threshold for sales? how much in sales before I have to get audited

 

Have to get audited? What exactly are you asking?

[1Cool]

Starting in 2011, PayPal is required by the IRS to report the sales of goods and services for customers who, in a single year receive:

 

• More than $20,000, AND

• 200 or more payments.

 

The new IRS 6050W changes apply to all payment providers, including PayPal. This includes payments received after January 1, 2011, with the first reports sent to the IRS in early 2012.

 

[NinjaSealed]

whats the paypal limit or threshold for sales? how much in sales before I have to get audited

 

$20k sales and 200 transactions in a year generates a 1099. That being said just because one isn't generated doesn't mean you don't have to pay.

[Snikt!1988]

i had around 16 k in sales last year... but I spent about as much as well...

[Snikt!1988]

thanks for the info

[wombat]

I can see the conversation now:

 

Random comic book seller: But the guys on the CGC message board told me this was OK.

IRS: I'm going to need you to bend over.

[1Cool]

i had around 16 k in sales last year... but I spent about as much as well...

 

They way I understand it is if your sales where at a net loss then you do not need to claim the sales. If you sold $16,000 worth of books that you paid $10,000 to buy then you need to claim the $6,000 (minus all the fees and deductions) even though you took the $16,000 and bought more books. Its what you sold the books for minus what you paid for the books generates your potential profit.

[Meeklo]

Just don't file it and when the IRS comes knocking at your door, just take a stand and tell them that they are your comics, you can do whatever you want with them, and they are not entitled to anything unless they are physically pouring blood, sweat, and tears into your comic book business.

 

Fight the power!!!

[mschmidt]

I sold a good amount of books last year and didn't get a tax form from PayPal (thank God).

 

I figured I'd try to write off my cell phone (used to run InstaGram sales page) gas, meals, partial home office, and even the money spent back into other books.

 

I assumed I didn't get a 1099 because I spent all the money while still in PayPayl.

 

 

You didn't get a 1099 form from paypal because you didn't exceed $20,000 in payments and 200 or more payments.

 

Please talk to a tax professional.

[1Cool]

Just don't file it and when the IRS comes knocking at your door, just take a stand and tell them that they are your comics, you can do whatever you want with them, and they are not entitled to anything unless they are physically pouring blood, sweat, and tears into your comic book business.

 

Fight the power!!!

 

I have a strange feeling we will be seeing a "free Meeklo" sales thread in the future.

[mschmidt]

Every time there is a tax thread, so much bad information gets thrown out. Things that seem like common sense are just wrong in the tax world. Seek professional tax help.

 

QFT

 

This is the best tax advice for a newbie.

[Meeklo]

Just don't file it and when the IRS comes knocking at your door, just take a stand and tell them that they are your comics, you can do whatever you want with them, and they are not entitled to anything unless they are physically pouring blood, sweat, and tears into your comic book business.

 

Fight the power!!!

 

I have a strange feeling we will be seeing a "free Meeklo" sales thread in the future.

 

Make it a charity thread and you might have more people to claim RAKs!

[NinjaSealed]

Since it is related to this thread, can anyone tell me where to find a monthly or yearly total of paypal fees paid. I remember it is a PITA from last year, but this year I can't find it at all.

[shadroch]

Be careful on the donations. There are lots of rules you need to follow. And one of the big ones is fair market value. You can't donate your drek and claim the original price as a deduction when no one would pay that amount today.

 

http://www.irs.gov/uac/Eight-Tips-for-Deducting-Charitable-Contributions

 

 

My accountant says if you donate new books, you can deduct the cover price. If you donate used books, its the fair market value. Any book listed in Overstreet has an assigned value. Use it. Just don't go crazy.

[W16227]

i had around 16 k in sales last year... but I spent about as much as well...

 

For the US - anyone with questions (and not operating as a LLC) should download schedule C ( form 1040).

 

If you do not understand the basics of this form - GET AN ACCOUNTANT. IF you do not understand the wording or even how to determine if you are using "cash" or "accrual" based accounting - then you are walking on thin ice,.

 

Most of the entries are not that difficult - but once you start deducting things like a home office you had better have those numbers correct. Too aggressive on these can result in an audit which is butthurt even if you are in the right....

 

You need to keep good records for filing - would recommend separate bank account and credit card for any side business. If you use your paypal a lot for personal buys - then a separate paypal account might be best as well.

 

This is to help you with the tracking of all costs and expenses- sources that you do not have to sort through a ton will help you with the math.

 

 

notes on LLC vs sole proprietor - if you do this as a side job without a lot of sales - the sole proprietor is a decent way to do this. Your tax rate is the same as your existing rate. You will (most likely) pay in a higher tax bracket this way (as your regular income is added to the comic book income)- but then do not have to pay the added costs of maintaining an LLC.

 

 

[1Cool]

I asked a seller at the Canton Con why he wouldn't accept credit cards or paypal tansfers and he said he didn't want any record of being there. Any guesses on how much of that money he took in he claimed on taxes?

[joeypost]

I asked a seller at the Canton Con why he wouldn't accept credit cards or paypal tansfers and he said he didn't want any record of being there. Any guesses on how much of that money he took in he claimed on taxes?

 

And that is why you now need a tax professional who will provide the best (and legal) way for you to minimize the tax footprint. It is worth every penny as it is labor and paperwork intensive.

[rob_react]

i had around 16 k in sales last year... but I spent about as much as well...

 

For the US - anyone with questions (and not operating as a LLC) should download schedule C ( form 1040).

 

If you do not understand the basics of this form - GET AN ACCOUNTANT. IF you do not understand the wording or even how to determine if you are using "cash" or "accrual" based accounting - then you are walking on thin ice,.

 

Get an accountant and at least understand the basics of accounting yourself so you can tell what's going on. The basics are not hard even if the details can be.

 

100 pages>

 

Accounting Made Simple: Accounting Explained in 100 Pages or Less

[jimbo_707]

I don't know about you, but many of my books are worth less than what paid for them 10—15 years ago. In the rare instance when I sell a comic for a profit, in order to offset that profit I will turn around and sell one or two books that I know I'm going to have to take a loss on. You can't deduct a loss on collectibles, so try not to record too large of a loss in any calendar year.

 

If you're one of the few collectors who has seen his collection appreciate in value long-term, good for you! You're making money on something most people lose money on.

[Prince Namor]

Every time there is a tax thread, so much bad information gets thrown out. Things that seem like common sense are just wrong in the tax world. Seek professional tax help.

 

QFT

 

This is the best tax advice for a newbie.

 

Does Turbo Tax count?