Quote:
Originally Posted by Exhibitman
A 1099 is just a report of how much you received, not how much you profited. Tax fraud is not a business strategy, it is a crime, and a dumb one at that. If you just don't pay taxes at all you will end up in the hobby wing at Leavenworth. Hope Mark Allen is a good cellie...Maybe he'll share his soap on a rope.
Taxes should not be an issue. If you are paying taxes on a profit, that is the same as in any other trade. The question is how do you minimize your tax exposure. There are ways to do it within the confines of a card business but they require planning and organization; I won't discuss the nuts and bolts so as not to be seen as providing legal or accounting advice. But just saying "F*** it" and not paying anything, that is amateurish.
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I am quite aware of the purpose of a 1099, not sure why you need to explain the purpose of a 1099 as I NEVER made any mention of a 1099 being used to report profits????
In regards to shows, I set up at about 5 shows a year over a 3-4 year period in order to sell off duplicates and had less than $1k in INCOME at each show. When I figured in my EXPENSES and COG, I had very little PROFIT (which is what I would pay my taxes on). I am quite sure if I needed to pay taxes on that absolute MINISCULE amount that I did make profit wise at the few shows I set up at, my accountant likely could have found some additional deduction to offset it. In some cases, I spent my INCOME from the show on new inventory at the show before leaving.
This would be like my wife reporting the $150 (cash) she "made" at our most recent garage sale as taxable income. Not really worth it.
As mentioned in my above post, to ensure my taxes are handled correctly is why I currently employ an accountant to handle my taxes...this allows me to minimize my tax exposure with my online selling and to ensure I am not ending up with Mark Allen.
My guess is almost EVERY member of this board (who lives in an applicable state) is guilty of not declaring and paying their state's usage tax on their out of state online purchases. Since I am set up as a sole proprietorship, I avoid paying these usage taxes in my state on any of the purchases I make in order to resell through my "business". There is a lot more exposure in regards to use taxes not being paid than weekend warriors who after expenses and COG make $50 profit at a card show.
Perhaps it is common at the shows you run for all of the sellers to report every dime of their income....in my area, in speaking with the dealers set up at the shows I did, I met just one dealer who did report his income. For this one dealer, card selling is his profession while the rest of these dealers were weekend warriors unloading their duplicates for very little if any PROFIT.