Its official, im now a "specialty" bulllion dealer (cringe)
gecko109
Posts: 8,231 ✭
I decided that for 2012 that I'd try my hand at dealing bullion. For years I have simply been a stacker, but I wanted a new hobby, and I love business simulation games.....so why not try this out? I have a great eye for the "tough" bullion that can be found near melt.
I made my 1st sale on Jan 15th, and all 4 of my sales so far have resulted in better than modest profits......about $700 on an initial outlay of $3500.
I'd like to know what to look out for as a dealer, as well as how to organize my paperwork for tax purposes. So far, my method is ultra simplistic. I simply print out the "sold" page of an item I sell. Then I attach my purchase receipt for cost basis, as well as the USPS receipt for a deduction. I then take the amount an item sold for minus my cost, paypal fee, ebay fee, and shipping fee to arrive at a "net profit". I staple all 3 items of paperwork together and stick in a manilla envelope marked "JAN 2012". At the end of the month, I plan on writing down on the envelope my total sales, total fees, total cost basis, and total net profit. I will have a seperate manilla envelope for each month.
Anyone have any tips, ideas for me on the accounting/record keeping side of the business? Am I missing anything? Thanks in advance, and wish me luck!
I made my 1st sale on Jan 15th, and all 4 of my sales so far have resulted in better than modest profits......about $700 on an initial outlay of $3500.
I'd like to know what to look out for as a dealer, as well as how to organize my paperwork for tax purposes. So far, my method is ultra simplistic. I simply print out the "sold" page of an item I sell. Then I attach my purchase receipt for cost basis, as well as the USPS receipt for a deduction. I then take the amount an item sold for minus my cost, paypal fee, ebay fee, and shipping fee to arrive at a "net profit". I staple all 3 items of paperwork together and stick in a manilla envelope marked "JAN 2012". At the end of the month, I plan on writing down on the envelope my total sales, total fees, total cost basis, and total net profit. I will have a seperate manilla envelope for each month.
Anyone have any tips, ideas for me on the accounting/record keeping side of the business? Am I missing anything? Thanks in advance, and wish me luck!
0
Comments
The only time I would use ebay would be to sell the collectible bullion that sells for quite a large premium over spot. In my experience most of the bullion floating around locally is certainly of little to no collector value.
For my ebay coin sales, I use two spreadsheets. First one is the "purchases/inventory" one, where I write the date of the purchase, price, other info. When I sell an item, I copy paste the info into a "sold" spreadsheet. Then I add values for: total amount received (bid+shipping fee), Ebay listing fees, Ebay FVF, Paypal fee, shipping fee. Then I have it calculate my net profit/loss in the final column.
<< <i>I plan on writing down on the envelope my total sales, total fees, total cost basis, and total net profit. >>
I'd personally try to use a spreadsheet such as excel because all the adding up can be automatic, and you can quickly calculate things such as %profit, %postage, %fees etc as well as sorting the data. e.g. at end of year sort by % profit and see what type of transactions have been the most profitable and easily see all the losses together etc.
Also ensure you have adequate checks for counterfeits or stolen property.
My additions:
1) Keep a separate bank account to avoid comingling personal vs business funds.
2) Make allowances for paying quarterly taxes.
3) Register your 'business' and get a separate tax ID number.
Best of luck on your new venture!
<< <i>Don't forget a business license and a bribe for the Alderman....... >>
Does a person need a business license to sell on ebay? Serious question.
<< <i>
<< <i>Don't forget a business license and a bribe for the Alderman....... >>
Does a person need a business license to sell on ebay? Serious question. >>
I doubt it.....was just yanking your chain about the fine Alderpeople of Baghdad On The Lake!
Envelopes?
Just stick to flipping on eBay.
Loves me some shiny!
Why open doors that don't need to be opened?
1) Keep a separate bank account to avoid comingling personal vs business funds.
That would be/is at the top of my "list" as well.
Good luck and thanks for the advice in helping me open my "store" too. Wait a minute, that makes us competitors now
Now go find me some Libertads!
<< <i>Sounds like your conflating the mild selling activity of a hobby with the big boy title of "bullion dealer".
Envelopes?
Just stick to flipping on eBay. >>
There comes a point in which one goes from title of "hobby activity" to "dealer". It probably has something to do with volume. If a person does $250k in gross sales on ebay, it would be difficult to call that person a "hobbyist".
At what point do you think that transition occurs?
Visit a CPA and burn off a couple of hundred getting some good tax advice here, that's how those guys make a living and they will make/save you many headaches and probably some good money. While there, consider if you want to be a llc, pc, what ever, but let this guy advise you and take his advice. Be careful messing with the taxman , that's what the CPA is for; better your friendly CPA's advice than to find yourself sitting in the naughty chair (audit).
Get a DBA (doing business as) with the local gov, probably the county. Keep your business machines down to a minimum and any other "office equipment" as that is the basis for your business property taxes. Folks can say that it is not something you need to do but when you go to the bank to open up your business account and get some checks the very first thing they will ask you for is your dba account number or certificate. Once you have your dba and bank account, you are free to roam.
So, to recap: Visit a CPA, get a dba.
Best of luck.
Assuming a license is not needed to sell on ebay (in any volume), what are the advantages to getting one?
So long as I have documented cost basis, sell price, and fee deductions, arent I covered for tax time?
I do not wish to deduct for things like my travel, or the $3.49 I spent on manilla envelopes. I can easily eat those minor expenses. I also do not wish to claim part of my home as a business office.
Basically, all im doing is traveling locally and buying items which Im 95% sure I can turn for a profit on ebay. Why would any type of business license be needed if I dont have a retail store, nor set up at coin shows?
Some people may call what im doing as just being a "flipper" on ebay. And I suppose that is a correct adjective. But what am I if I do a volume of $250,000 in sales in a year? $500,000? How about the guy who sells $1,000,000 a year on ebay....is he still a "flipper"?
Point of fact: I have done $4,000+ in sales in my 1st 7 days. I could have done far more than that if I had more start up capital. As profits accumulate, and as I churn more money, my volume will increase proportionately (I hope).
So if you extrapolate my sales in my 1st week and apply them to 1 year....with no additional volume, then im on pace to do about a quarter of a million in sales my 1st year.
Of course, as I gain more money to work with, that volume will grow. Its very conceivable that I will come close to $350,000 in sales if I work hard enough.
I dont care what anyone says, thats NOT the definition of a "flipper". Thats a "dealer" in my opinion.
<< <i>Keep it a "hobby" ... Limit your eBay sales to less than 20k per year. Sell some of your bullion to different dealers at coin shows and National bullion dealers such as APMEX. Avoid 1099's
I have no desire to avoid the taxes....none. In a few days, i'll already be at over $6,000 in sales for just 10 days in this new "business".
If you are really going to become a business, and I highly discourage it, then you need to take advantage of every possible expense that you incur to help minimize your profits, which you will have to pay taxes on. Trips to the post office = mileage. Trips for supplies, internet service, etc. They will add up, but probably won't add up to much.
$6000 in sales is one thing, but what is the actual net income on that? Then calculate the taxes on the gain , including the hefty self-employment tax. Then see what is truly left over. Compare that to what is left over if you treat this all as a hobby.
Then consider NOT becoming a business.
and remain just being a guy selling some items on eBay, maybe even creating a few more accounts to do so. I know some bigtime eBay sellers that do that to avoid the "appearance" of being a bigtime ebay seller
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I am not a Bullion Dealer. I am guy nibbling thin margins with volume (or if spot pops, fatter margins) .
The amount of sales is moot as the cost of goods sold is also high. Not saying you cant be a bullion dealer,
but announcing you are and then asking the most entry level entrepreneur questions sounds impulsive.
Now if you Net 350,000 EBITDA a year, then my I will call you anything you want to be called
Loves me some shiny!
<< <i>If i buy Monster Boxes and sell them on eBay then I could churn $30,000 a month on eBay easy. >>
And you will owe the IRS taxes on all of the profit. Why not do it under a Schedule C (instead of treating it as an investment capital gain) and enjoy a greater tax reduction by claiming all of the associated expenses.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Cost of goods was $29,000
Loves me some shiny!
peacockcoins
<< <i>All of the profit??
Cost of goods was $29,000
Cost of goods sold applies if using Sched. C. where all of your expenses are more allowable.
Schedule D recognizes your basis which is lower than Sched. C's cost of goods sold because of the fewer allowable expenses with Schedu. D. Thus the advantages of Sched. C over D. One must weigh added expense allowances against the Sched. C's added self-emplyment tax to make the correct choice. In my case it was Sched. C.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Good luck with your venture, but honestly, the fact you're asking so many (valid and pertinent) questions speaks volumes in defining the distinction between "Dealer" and "Hobbyist". >>
Many dealers successfully made the transition from hobbyist. I say the OP should go for it. He has the bullion knowledge to do so. Anyone buying or selling that sees a profit is in a venture (in the eyes of the IRS) including the hobbyist who makes a profit. How you organize, document, and file taxes will dictate how much of the profit the IRS says you get to keep. Those that profit and think they are exempt from the IRS's reach because they don't consider themselves "in business" are mistaken. The age of electronic transactions and stricter reporting requirements of financial organizations (including paypal) pulls them closer to the IRS's attention.
<< <i>I'd like to know what to look out for as a dealer, as well as how to organize my paperwork for tax purposes. So far, my method is ultra simplistic. I simply print out the "sold" page of an item I sell. Then I attach my purchase receipt for cost basis, as well as the USPS receipt for a deduction. I then take the amount an item sold for minus my cost, paypal fee, ebay fee, and shipping fee to arrive at a "net profit". I staple all 3 items of paperwork together and stick in a manilla envelope marked "JAN 2012". At the end of the month, I plan on writing down on the envelope my total sales, total fees, total cost basis, and total net profit. I will have a seperate manilla envelope for each month. >>
the advantage of Schdule C is that you also get to include other overhead including home office space, business travel (coin shows!) and supplies, I don't write off office space or equipment (depreciation), too much hassle for the small guy.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>You might have added desire to avoid or minimize the taxes when you see how much they eat up. Check out the self employment tax. That one alone is enough to make most of us have 2nd thoughts about whether or not we are buying/selling as a hobby or if we really want to go all in and declare ourselves a business.
If you are really going to become a business, and I highly discourage it, then you need to take advantage of every possible expense that you incur to help minimize your profits, which you will have to pay taxes on. Trips to the post office = mileage. Trips for supplies, internet service, etc. They will add up, but probably won't add up to much.
$6000 in sales is one thing, but what is the actual net income on that? Then calculate the taxes on the gain , including the hefty self-employment tax. Then see what is truly left over. Compare that to what is left over if you treat this all as a hobby.
Then consider NOT becoming a business. >>
This is a great response, as well are Derry's responses. I am employed full time and will continue to be so during this venture. This is simply a side business for me. I dont think self employment tax applies because the vast majority of my income is derived from my full time job.
I have an actual $4,100 in sales in my 1st 7 days in business with an actual profit (after all fees) of $700. I figure that my tax rate on this profit will either be 28% for the capital gains on bullion/collectibles, or 28% which is my bracket for personal income.
So by my best calculations, I owe $196 in tax as of right now, with $504 in "white meat". Thats not a bad 7 day start! At that rate...if I can sustain it....it will mean about $26,000 in after tax net profit for the year.
Those numbers would indicate that I was somewhere between "hobbyist" and "dealer". Once I start posting annual after tax income north of $50k, then there is no denying im a dealer at that point. Its a game of semantics I suppose.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>If i buy Monster Boxes and sell them on eBay then I could churn $30,000 a month on eBay easy.
I am not a Bullion Dealer. I am guy nibbling thin margins with volume (or if spot pops, fatter margins) .
The amount of sales is moot as the cost of goods sold is also high. Not saying you cant be a bullion dealer,
but announcing you are and then asking the most entry level entrepreneur questions sounds impulsive.
Now if you Net 350,000 EBITDA a year, then my I will call you anything you want to be called
If you sell 1,000 silver eagles every month......month in, month out....what are you other than a "dealer"? If your profits are not very impressive, you are simply a lousy dealer, but a dealer nonetheless. A "hobbyist" doesnt sell 10,000+ ounces of silver a year!
<< <i>buying or selling as a hobby does not exempt one from the 28% captial gains tax on gold and silver. Buying or selling as a hobby tends to make one THINK they are exempt from the tax. Declaring oneself a business has nothing to do with whether or not one gets taxed on their profit; it does affect how they get taxed and what expenses become allowable. >>
Derry, if I dont "officially" become a business....and continue to do what im doing, then are my assumptions correct in that:
I take the amount an item sold for - the amount it cost me - paypal+ebay fees - actual shipping cost (im 100% free shipping) = Net profit x .28 = amount in tax owed?
If I keep this formula precisely (no matter what I use to keep track), am I then in proper IRS compliance?
I agree . Having watched the Gecko, from pre-geckobars to present one could conclude that he does have the proper entrepreneural spirit and will. The best way to get started is to ...get started and see where it leads you.
Business licenses are governed by local and state requirements. If what you sell requires you to collect sales taxes you will probably need a business license to collect them and turn them over to the state. Some states do not require sales taxes on coins.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>buying or selling as a hobby does not exempt one from the 28% captial gains tax on gold and silver. Buying or selling as a hobby tends to make one THINK they are exempt from the tax. Declaring oneself a business has nothing to do with whether or not one gets taxed on their profit; it does affect how they get taxed and what expenses become allowable. >>
Derry, if I dont "officially" become a business....and continue to do what im doing, then are my assumptions correct in that:
I take the amount an item sold for - the amount it cost me - paypal+ebay fees - actual shipping cost (im 100% free shipping) = Net profit x .28 = amount in tax owed?
If I keep this formula precisely (no matter what I use to keep track), am I then in proper IRS compliance? >>
That is a great specific question for your tax advisor. It might be that simple, it might not be that simple. 28% might be too little, 28% might be too much depending on what your other tax doings amount to.
On a postive note, I say go for it!
Too many positive BST transactions with too many members to list.
<< <i>
<< <i>You might have added desire to avoid or minimize the taxes when you see how much they eat up. Check out the self employment tax. That one alone is enough to make most of us have 2nd thoughts about whether or not we are buying/selling as a hobby or if we really want to go all in and declare ourselves a business.
If you are really going to become a business, and I highly discourage it, then you need to take advantage of every possible expense that you incur to help minimize your profits, which you will have to pay taxes on. Trips to the post office = mileage. Trips for supplies, internet service, etc. They will add up, but probably won't add up to much.
$6000 in sales is one thing, but what is the actual net income on that? Then calculate the taxes on the gain , including the hefty self-employment tax. Then see what is truly left over. Compare that to what is left over if you treat this all as a hobby.
Then consider NOT becoming a business. >>
This is a great response, as well are Derry's responses. I am employed full time and will continue to be so during this venture. This is simply a side business for me. I dont think self employment tax applies because the vast majority of my income is derived from my full time job.
I have an actual $4,100 in sales in my 1st 7 days in business with an actual profit (after all fees) of $700. I figure that my tax rate on this profit will either be 28% for the capital gains on bullion/collectibles, or 28% which is my bracket for personal income.
So by my best calculations, I owe $196 in tax as of right now, with $504 in "white meat". Thats not a bad 7 day start! At that rate...if I can sustain it....it will mean about $26,000 in after tax net profit for the year.
Those numbers would indicate that I was somewhere between "hobbyist" and "dealer". Once I start posting annual after tax income north of $50k, then there is no denying im a dealer at that point. Its a game of semantics I suppose. >>
Uh, I was writing on the side all the years I was working downtown, and while my writing income was only a few percent of my full-time income, it was (and still is) subject to Self-Employment tax.
Sounds like that visit to the tax accountant is a good idea.
<< <i>
<< <i>buying or selling as a hobby does not exempt one from the 28% captial gains tax on gold and silver. Buying or selling as a hobby tends to make one THINK they are exempt from the tax. Declaring oneself a business has nothing to do with whether or not one gets taxed on their profit; it does affect how they get taxed and what expenses become allowable. >>
Derry, if I dont "officially" become a business....and continue to do what im doing, then are my assumptions correct in that:
I take the amount an item sold for - the amount it cost me - paypal+ebay fees - actual shipping cost (im 100% free shipping) = Net profit x .28 = amount in tax owed?
If I keep this formula precisely (no matter what I use to keep track), am I then in proper IRS compliance? >>
Study up on allowable expenses when using sched. D (I use sched. C). If your fees are allowable then you are correct. Also consider that the minimum 28% tax on captial gaiins may not be as high on business inventory sold using sched. D. Do you think jewelers pay 28% on their gold ring sales? I don't believe they do. I believe the gold jewelry is treated like the rest of the jewelry when taxes on sale of inventory are calculated. If correct, this could be the advantage of you using schedule C even after you add in the self employment tax.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Uh, I was writing on the side all the years I was working downtown, and while my writing income was only a few percent of my full-time income, it was (and still is) subject to Self-Employment tax.
Sounds like that visit to the tax accountant is a good idea. >>
I will be talking to my tax guy about all of this stuff next month for sure. But Tom....just for the sake of discussion.....if a person makes a 1 time sale of $250,000 worth of bullion, he is on the hook for taxes on profits realized.....but he certainly wont owe any "self employment" taxes, would he? So why is there any difference if he sells that same $250,000 spread out over 12 months?
So there must be a trigger that enacts a self employment tax. Does it go by % of total income? Does it go by a certain number of sales in a calendar year? Or maybe you were taxed because you sold your labor? I dont know?
<< <i>I will be talking to my tax guy about all of this stuff next month for sure. But Tom....just for the sake of discussion.....if a person makes a 1 time sale of $250,000 worth of bullion, he is on the hook for taxes on profits realized.....but he certainly wont owe any "self employment" taxes, would he? So why is there any difference if he sells that same $250,000 spread out over 12 months?
So there must be a trigger that enacts a self employment tax. Does it go by % of total income? Does it go by a certain number of sales in a calendar year? Or maybe you were taxed because you sold your labor? I dont know? >>
This applies to all collectors who sell at a profit and want to comply with tax requirements:
Self employment tax is due when using Sched. C (business income), it is the trigger. Schedule C would be required for Tom's income. Keep in mind that Sched. D is for investments (capital gains/losses) and there is no self employment tax on investment gains. Your situation allows you the choice of C or D, you get to choose if what you sell is a personal investment or business inventory. Once you choose, it is a lot of work to change the way you treat it later.
The 28% tax on collectibles is for captital gains on collectibles. I find no mention of collectibles or a minimum 28% tax on any kind of inventory taxed when using Sched. C. Since you have a choice between the two, you need to choose the one that allows the greatest deductions for expenses and at the same time requires you to pay the lowest taxes. While Sched. D requires a 28% tax on collectibles, your tax rate for Sched. C is determined when you add the taxable profit from C to all of your other income on the 1040. The total of that income after 1040 deductions determines your overal tax rate for the year. Basically, with Sched. C, you pay self employment tax on the profit and add the profit to your personal income on the 1040. Keep in mind that Sched. C also does not differentiate on how long you hold inventory (short and long term on Sched. D). In my case (one employee, work from home) Schd. C provides the best tax savings, even after adding self employment tax to the Schd. C profit only.
Another thing to keep in mind: The IRS says income taxes are due to them on a quarterly basis, not yearly. Reason most people don't realize this is because they get a regular paycheck that has income taxes withheld and sent to the IRS on less than a quarterly basis. Regardless of the source of untaxed income, it's size may require you to make one or more quarterly tax payments to the IRS. Estimated quarterly payments are not rocket science - they are estimated, by you. The goal is to not owe too much at the end of the year. If you do they will hit you with a penalty on the amount of their money that you held until the end of the year. This penalty is also realized by employees that do not have enough withheld throughout the year. I just send them a check each quarter that equals 20% of the quarter's sales. I end up getting the excess back as a tax refund. It all comes out even at the end of the year, the IRS just doesn't want you holding their money too long.
Before you talk to your tax guy, study up on income and Scheds. C & D at the IRS website. Lots of good information that will prepare you to ask the right questions.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Schedule D approaches everything as a personal investment. In that case, you are only concerned with your cost basis in order to derive your net profit. Then you pay tax based on your total income (of which your investment income is only a fraction).
I believe that there are tests to determine when you MUST declare yourself a business, similar to the test you would use to differentiate between a farm, and a "hobby farm". I think it is something like - if you make a profit in at least 2 years out of 5, then you must treat your income as business income. Something like that.
Either way, you need an accountant and a spreadsheet.
You can do it, Gecko. It just takes organization, will and work. Good Luck.
I knew it would happen.
<< <i>You've indicated to approach this as a profit-making venture. If you become a business per-se, you will become more interested in identifying *all* of your expenses so that you can deduct them, thereby increasing your net profit. That is Schedule C.
Schedule D approaches everything as a personal investment. In that case, you are only concerned with your cost basis in order to derive your net profit. Then you pay tax based on your total income (of which your investment income is only a fraction).
I believe that there are tests to determine when you MUST declare yourself a business, similar to the test you would use to differentiate between a farm, and a "hobby farm". I think it is something like - if you make a profit in at least 2 years out of 5, then you must treat your income as business income. Something like that.
Either way, you need an accountant and a spreadsheet.
You can do it, Gecko. It just takes organization, will and work. Good Luck. >>
State and local law determine the need for a business license. It is not a requirement that you have one to file a Sched. C. The IRS is not in the license business (yet).
The collection of sales taxes on behalf of the state is also another consideration that cannot be overlooked when selliing inventory. It should not affect the sale of personal investments when using Sched. D. Something to consider when making the choice.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I guess I was refering to "business income", which requires reporting on Schedule C, rather than any licensing requirements. I think there is a distinction between business income and personal income even if you are filing as an individual. I could be wrong. I might have been thinking about "reporting requirements" in my consideration of "business income" - rather than the licensing requirements.
The licensing requirements vary by locale, and I'm guessing that it would only be the city or the county for Gecko. If he were to incorporate, then (in the Chicago area) he'd be filing separate corporate tax returns for city, county, state, and federal. There are multiple aspects to how he decides to conduct business. If you are a one-man-show, simpler is always better, in my opinion.
I knew it would happen.
Let me say that Gecko definitely has the acquired knowledge to do this.
A deal with him, in which I acquired a trove of fractional silver bars sparked and unquenchable appetite for fractional silver!
Thanks Geck! Good luck.
Loves me some shiny!
written money laundering plan that meets all the requirements of the govt. You also have to conduct period audits of your system as well as training.
Failure to comply carries penalties of a huge fine....$250K if I recall. PA2 is specifically aimed at pawn shops, jewelers, cashforgold, and coin/bullion dealers.
You can write your own plan but chances are you'll be leaving something out. I know coin dealers who have had to pay $1,000 or so to have ex-IRS officials write
their plans for them.
I believe PA2 still applies to either schedule C or D filers. One can money launder drug or organized crime money in either scenario.
Good luck.
roadrunner
<< <i>Keep it a "hobby" ... Limit your eBay sales to less than 20k per year. Sell some of your bullion to different dealers at coin shows and National bullion dealers such as APMEX. Avoid 1099's
Actually, according to PayPal:
"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.
So, even if you sell more than $20k, if your keep the number of transactions under 200, they won't report you. I am not saying you should, you just won't get a 1099 from PayPal.
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.
So, even if you sell more than $20k, if your keep the number of transactions under 200, they won't report you. I am not saying you should, you just won't get a 1099 from PayPal.
Beware that although they've set these numbers, one could (probably will) still face scrutiny if they do $19,500 worth of business and/or 198 transactions
Liberty: Parent of Science & Industry
<< <i>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.
So, even if you sell more than $20k, if your keep the number of transactions under 200, they won't report you. I am not saying you should, you just won't get a 1099 from PayPal.
Beware that although they've set these numbers, one could (probably will) still face scrutiny if they do $19,500 worth of business and/or 198 transactions
I kind of wonder what they would do if you sold one item for $50,000????
The Gov does not want you to start a business and succeed.
Just take the red pill. You get to drool in front of the TV all day and all
you have you to do is check your mailbox once a month.
If you cut a hole in your recliner you can save trips to the bathroom.
Why pull the wagon when you can ride in it.
Vote Obama 2012.
Loves me some shiny!
<< <i>Gecko, sounds like a lot of trouble.
The Gov does not want you to start a business and succeed.
Just take the red pill. You get to drool in front of the TV all day and all
you have you to do is check your mailbox once a month.
If you cut a hole in your recliner you can save trips to the bathroom.
Why pull the wagon when you can ride in it.
Vote Obama 2012. >>
I like it.