That's a very good point. The IRS does not allow people to use a "hobby" as a "business" for tax reasons, as it almost always loses money and yields nice consistent tax write-offs. It would really be nice if we could all declare the money we spend on audio stuff as a "business loss".
Many of us may buy and sell, and tinker a lot (doing "R&D"), but are not really doing it with an expectation of eventual long term sustainable profit. I think the time frame the IRS uses is 5 years.
But, if you have a long term internet storefront, with over 30 items for sale, and exceed 200 transactions *and* $20K revenue per year, that's probably not a hobby. And *why* anyone would find time to make over 200 shipments a year, and make no profit from it, is another good question you would probably need to address with your tax agency.
One other thing. If you have not been filing, and should have been, there is solace in the fact you "got away with it". The IRS can and will go back and look at previous years, and make you account for previous questionable activities.
The IRS lost that one, proof of truely trying to run a for profit business does not time out anymore.
I think it was a woman script writer that hadn't sold a script for seven or eight years.
if you dont insist on any of the writeoffs then IRS wont mess with your hobby, you need to show that these financial transcations arent masking profits but that should be pretty straightforward?
the root of much of this is that so many corporations stopped paying tax all together. GE doesnt pay any tax in america. my company (which i wont disclose) doesnt pay much tax (below 10%). Someone got to pay if and as usual its the folks who cant afford the lobbyists that take it in the gut.
i was just informed by my accountant via the IRS that next year i not only have to share by bank accounts overseas with the IRS, i also have to disclose the branch office and the maximum balance in the account during the year. I work overseas and while this wont change anything for me (i pay my taxes and dont hide income) it certainly is a bit more effort to not just declare what money you have earned in income but also every bank account you've had during the year and all their balances.
i really wish someone would simplify the US tax systems, in this i think the europeans got it right. i used to file in europe and basically all banks and employers reported to the IRS. the IRS calculated what they thought the taxes should be and if you agreed with it then you just signed the dotted line. In the country i was in there was a single deduction for interest, you pick which one you wanted -your mortgage, credit card, car payment or whatever. The percentages they took was very high, but the tax system was easy to understand and very efficient. and i like the idea of everyone is putting money in, there is none of the lawyering around to essentially pay no tax for the big corporations. i guess i am a fan of a flattened tax system.
anyway, its sad to see your store go. i wish i could change something to make you reconsider.
the root of much of this is that so many corporations stopped paying tax all together. GE doesnt pay any tax in america. my company (which i wont disclose) doesnt pay much tax (below 10%). Someone got to pay if and as usual its the folks who cant afford the lobbyists that take it in the gut.
i was just informed by my accountant via the IRS that next year i not only have to share by bank accounts overseas with the IRS, i also have to disclose the branch office and the maximum balance in the account during the year. I work overseas and while this wont change anything for me (i pay my taxes and dont hide income) it certainly is a bit more effort to not just declare what money you have earned in income but also every bank account you've had during the year and all their balances.
i really wish someone would simplify the US tax systems, in this i think the europeans got it right. i used to file in europe and basically all banks and employers reported to the IRS. the IRS calculated what they thought the taxes should be and if you agreed with it then you just signed the dotted line. In the country i was in there was a single deduction for interest, you pick which one you wanted -your mortgage, credit card, car payment or whatever. The percentages they took was very high, but the tax system was easy to understand and very efficient. and i like the idea of everyone is putting money in, there is none of the lawyering around to essentially pay no tax for the big corporations. i guess i am a fan of a flattened tax system.
anyway, its sad to see your store go. i wish i could change something to make you reconsider.
Well, I guess Tubelab doesn't rate since I didn't get one. 200 transactions, maybe, but I think I'm short a few. 20K, not even in my dreams, more like 5K. I do print out the year's report every year stuff it into Excel, and make a P/L statement. It's been black only twice in 7 years, but I keep "trying" to make a profit.
Either way I don't see how a 1099-K makes any difference since you should have a P/L statement anyway. I do agree that the BS level is far too much. I started using an accountant when I started another company. My paper 1040 and associated stuff is about 1/4 inch thick. Then there is another 1/4 inch for Tubelab Inc.
How dare you claim that for yourself !
(me received a coffee visit of two IRS people to parler about the audio stuff i buy under company registration, duh)
At least you did a lot of folks a favor for quite some time, Mr Walton.
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The site is working now. Don't know what was problem as earlier.
I didn't spend much time looking around there, but it all seems like a bunch of BS aimed at protecting their profits.
Like this quote from the section talking about possible local auctioneer regulations being imposed....
"There is no evidence that imposing new regulations and licensing requirements upon eBay or eBay sellers would provide any additional consumer protection. Instead, any new regulations would impose unneeded costs and burdens upon buyers and sellers alike."
Yeah, like really give a **** what it costs sellers to do business on ebay. Sounds like they just want to be able to squeeze all they can out of customers on their own. In the last 60 days I've payed ebay and paypal over $250 in fees. And no, I don't run an ebay store.
I didn't spend much time looking around there, but it all seems like a bunch of BS aimed at protecting their profits.
Like this quote from the section talking about possible local auctioneer regulations being imposed....
"There is no evidence that imposing new regulations and licensing requirements upon eBay or eBay sellers would provide any additional consumer protection. Instead, any new regulations would impose unneeded costs and burdens upon buyers and sellers alike."
Yeah, like really give a **** what it costs sellers to do business on ebay. Sounds like they just want to be able to squeeze all they can out of customers on their own. In the last 60 days I've payed ebay and paypal over $250 in fees. And no, I don't run an ebay store.
It's not dead, it's just resting:
https://www.youtube.com/watch?v=4vuW6tQ0218
I have to take a break.
https://www.youtube.com/watch?v=4vuW6tQ0218
I have to take a break.
I do love that skit.
I remember reading about the nudge nudge skit and how presenting that script was apparently a hard conversation to have to explain the funny. The dead parrot skit was much the same apparently.
https://m.youtube.com/watch?v=AGrvQ1c5khU
So, does anyone in the world know where we can now reliably buy matched Latfets and Fets? I had grand plans to build an F5 with 2 pairs of Latfets per channel and an F4 ... Back to buying in bulk and matching I guess!
I remember reading about the nudge nudge skit and how presenting that script was apparently a hard conversation to have to explain the funny. The dead parrot skit was much the same apparently.
https://m.youtube.com/watch?v=AGrvQ1c5khU
So, does anyone in the world know where we can now reliably buy matched Latfets and Fets? I had grand plans to build an F5 with 2 pairs of Latfets per channel and an F4 ... Back to buying in bulk and matching I guess!
I just extended my paypal account from buyer only to seller as well.
I had to fill in a form on line stating that I was not resident in the US or a US citizen.
It is definitely easier to open an run a business in the UK. You only have to file tax in the 2nd year of operation. You only have to get a VAT number if you do more than GBP80 000 a year, or you expect to do more than that in the coming year. After you register, you can claim back 4 years of VAT receipts.
Tough **** for you guys on the other side of the pond. I feel for you man.
Looks like mailing cash is the way forward - its usually only a few $ for DIY stuff anyway and even if your miss rate is 1 in 20 you are still ahead, but I assume mail in the USA is very good and secure.
I had to fill in a form on line stating that I was not resident in the US or a US citizen.
It is definitely easier to open an run a business in the UK. You only have to file tax in the 2nd year of operation. You only have to get a VAT number if you do more than GBP80 000 a year, or you expect to do more than that in the coming year. After you register, you can claim back 4 years of VAT receipts.
Tough **** for you guys on the other side of the pond. I feel for you man.
Looks like mailing cash is the way forward - its usually only a few $ for DIY stuff anyway and even if your miss rate is 1 in 20 you are still ahead, but I assume mail in the USA is very good and secure.
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