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Well here is the deal.
If you are running a real business and being honest about your taxes, you are already reporting that income.

If you have few transactions - less than say 15 per month you will not see any change.

If you are small enough to have less than $20,000 in transactions you won't fall under.

If you run a group buy - have your buyers send the funds "personal" - rather than as payment for goods, personal transactions are not included in the IRS rule.

Myself, I already print the transactions every month and use them when doing my taxes. So it will have little if any impact on me and none on my tax bill.
 
dogcatcher said:
If you are not reporting the income it is TAX FRAUD, pure and simple.
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Maybe, but if you really track your expenses, then those selling blanks will be surprised at just how little they make. So far I've spent well over $300 on casting supplies. And I've sold a small number of blanks. Hmmmmm. Maybe I'm entitled to government assistance.:rolleyes:

But seriously, it's probably time for those who sell the smaller quantities to track expenses & report their sales & expenses on their taxes.
 
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BSea said:
dogcatcher said:
If you are not reporting the income it is TAX FRAUD, pure and simple.
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Maybe, but if you really track your expenses, then those selling blanks will be surprised at just how little they make. So far I've spent over well over $300 on casting supplies. And I've sold a small number of blanks. Hmmmmm. Maybe I'm entitled to government assistance.:rolleyes:

But seriously, it's probably time for those who sell the smaller quantities to track expenses & report their sales & expenses on their taxes.
Click to expand...

That is the purpose of filing a tax return. Even hobby income is be taxable, my advice is seek competent tax advice. Key word, competent, your signature goes on the return, you are responsible if any thing is wrong with it.
 
Not so....

dogcatcher said:
If you are not reporting the income it is TAX FRAUD, pure and simple.
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Failure to report income is NOT in and of itself Tax Fraud. If the IRS detects that you have failed to report all your income, they will simply send you a bill for what they think you owe. They will not charge you with Tax Fraud.

There are a lot of reasons for that but the principal one is that if you are charged with fraud, you become entitled to all of your constitutional rights and the Government must prove your guilt just as if you robbed a bank. In tax matters, that can become a very difficult and expensive thing to do.

On the other hand, if the IRS just says you didn't declare all of your income and owe them money, you have few rights and you must prove that you don't.
 
Social Security

bitshird said:
BUT ISN'T INCOME UNLIMITED IF YOU ARE OVER 70??
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You are thinking of income that reduces your Social Security check. Which has little or nothing to do directly with the income taxes you pay. Including whether you pay taxes on your Social Security benifits.
 
Smitty37 said:
dogcatcher said:
If you are not reporting the income it is TAX FRAUD, pure and simple.
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Failure to report income is NOT in and of itself Tax Fraud. If the IRS detects that you have failed to report all your income, they will simply send you a bill for what they think you owe. They will not charge you with Tax Fraud.

There are a lot of reasons for that but the principal one is that if you are charged with fraud, you become entitled to all of your constitutional rights and the Government must prove your guilt just as if you robbed a bank. In tax matters, that can become a very difficult and expensive thing to do.

On the other hand, if the IRS just says you didn't declare all of your income and owe them money, you have few rights and you must prove that you don't.
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Smitty, be very very careful here. yes it is, and yes I know from experience. I used to do racecar and hot rod work, and rebuilt a frame for a modified, kept the price low, ie under the table, and the person I did it for claimed it as an expense, and I got in trouble for not reporting it. Seven years worth of audits, a fine and interest. I do not think they changed the laws since 1984 in regards to this.
 
You did it

JerrySambrook said:
Smitty37 said:
dogcatcher said:
If you are not reporting the income it is TAX FRAUD, pure and simple.
Click to expand...
Failure to report income is NOT in and of itself Tax Fraud. If the IRS detects that you have failed to report all your income, they will simply send you a bill for what they think you owe. They will not charge you with Tax Fraud.

There are a lot of reasons for that but the principal one is that if you are charged with fraud, you become entitled to all of your constitutional rights and the Government must prove your guilt just as if you robbed a bank. In tax matters, that can become a very difficult and expensive thing to do.

On the other hand, if the IRS just says you didn't declare all of your income and owe them money, you have few rights and you must prove that you don't.
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Smitty, be very very careful here. yes it is, and yes I know from experience. I used to do racecar and hot rod work, and rebuilt a frame for a modified, kept the price low, ie under the table, and the person I did it for claimed it as an expense, and I got in trouble for not reporting it. Seven years worth of audits, a fine and interest. I do not think they changed the laws since 1984 in regards to this.
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There had to be more to that than you mentioned here -- and you're right for not mentioning it. It is none of my business or anyone elses.
 
If I understand a lot of what I've learned in recent years, NOT FILING your tax return is a crime that can get you put in jail. But the act of not filing is completely different from tax fraud, when you've intentionally (or unintentionally) reported your income and/or deductions inaccurately, and usually to your personal benefit. Is that not correct?
 
Smitty37 said:
bitshird said:
BUT ISN'T INCOME UNLIMITED IF YOU ARE OVER 70??
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You are thinking of income that reduces your Social Security check. Which has little or nothing to do directly with the income taxes you pay. Including whether you pay taxes on your Social Security benifits.
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I think your correct on this one Smitty, we're all entitled to earn unlimited income any time in our lives, so long as we give the IRS "their fair share" of it. I think 70 age has more to do with incomes affect on SSI, and for those already at retirement age, it might be low. I don't know for a fact, but I do know a 65 year old friend that was worried about making too much the past couple years when he was 63&64, but now that's he's 65 it's not a concern to him.
 
Changes often

76winger said:
Smitty37 said:
bitshird said:
BUT ISN'T INCOME UNLIMITED IF YOU ARE OVER 70??
Click to expand...

You are thinking of income that reduces your Social Security check. Which has little or nothing to do directly with the income taxes you pay. Including whether you pay taxes on your Social Security benifits.
Click to expand...

I think your correct on this one Smitty, we're all entitled to earn unlimited income any time in our lives, so long as we give the IRS "their fair share" of it. I think 70 age has more to do with incomes affect on SSI, and for those already at retirement age, it might be low. I don't know for a fact, but I do know a 65 year old friend that was worried about making too much the past couple years when he was 63&64, but now that's he's 65 it's not a concern to him.
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The government changes the rules on what you can earn without reducing your check frequently - they are totally different now than when I started collecting 12 years ago - and they were different then from when my brother retired about 7 years before that.
 
And I'm sure whatever they settle in on now will be completely different in about 15 years, when I reach the age 70 point, where I can consider any of it!
 
Not necessarily...

76winger said:
If I understand a lot of what I've learned in recent years, NOT FILING your tax return is a crime that can get you put in jail. But the act of not filing is completely different from tax fraud, when you've intentionally (or unintentionally) reported your income and/or deductions inaccurately, and usually to your personal benefit. Is that not correct?
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Not filing a tax return is usually not going to get you put in jail. Although it can if you absolutely refuse to file. If you pay your taxes even though you don't file a return, you won't go to jail nor will the IRS come after you unless they think you've underpaid. If they've got your money they will not expend their resources just to make you file a return. They would look mighty dumb hauling you in front of a Judge so the government would have to give you money.

There was an employee who worked for me when I was a line manager at IBM who didn't file for 6 years because he didn't like the way the Fed was spending the money. When I told him that by not filing he was probably paying more taxes than he needed to he started filing again. The IRS just helped him file the returns for prior years (only 3 of the 6) and sent him a refund check for the over payments for those three years. A small penalty was deducted for late filing.
 
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http://www.thefreedictionary.com/fraud

fraud (frôd)
n.
1. A deception deliberately practiced in order to secure unfair or unlawful gain.
2. A piece of trickery; a trick.

Anyone that cheats on their tax return is committing tax fraud. They may not be formally charged with fraud by the IRS, but they are still committing fraud against the government. Not only are they cheating the government, they are also cheating each and every taxpayer that pays their fair share.

Some government agencies have cyber crime units, there are people that are looking for people that may be violating the laws of that agency. What you write on a public forum can be a dangerous thing.
 
Legal term not dictionary

dogcatcher said:
http://www.thefreedictionary.com/fraud

fraud (frôd)
n.
1. A deception deliberately practiced in order to secure unfair or unlawful gain.
2. A piece of trickery; a trick.

Anyone that cheats on their tax return is committing tax fraud. They may not be formally charged with fraud by the IRS, but they are still committing fraud against the government. Not only are they cheating the government, they are also cheating each and every taxpayer that pays their fair share.

Some government agencies have cyber crime units, there are people that are looking for people that may be violating the laws of that agency. What you write on a public forum can be a dangerous thing.
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I don't think I'm going to lose any sleep over "big brother" watchin me on the internet. If I ever think I have to do that I'll find another country to live in.

While I don't cheat on my taxes, if John Doe cheats on his has no impact what-so-ever on me or my taxes. It is a matter between John Doe and the Government.

With our tax code and regulations (over 60,000 pages) being the most complex on the planet, how many of us actually know if we paid the correct amount or not? Much of the time you can't even ask the IRS and find out for sure when you have a question. They will give you an answer - but - they aren't bound by it, even if they put it in writing.

There are over 500 different forms for filing taxes, reporting income or claiming special interest deductions and/or credits.
 
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Dogcatcher,
Thank you for telling Smitty that once again he is wrong on something he is telling others they are wrong about.

Smitty,
I lived it, paid for it, and almost 30 years later, still wonder if I am going to get auditted again.
Do not tell me I am wrong on something I had to go through.
Also, did you know that when you get charged, even if not guilty, your name gets published in the papers around your community?
You should not be telling people it is not something that it is, since it is something you have absolutely no experience with.
I do not care if you ran a business or worked for the IRS, the fact is, when you mis-represent, it is fraud, just how far THEY want to push it is a different story.
And re-read what was said before you make a conclusion and state on it.

dogcatcher said:
http://www.thefreedictionary.com/fraud

fraud (frôd)
n.
1. A deception deliberately practiced in order to secure unfair or unlawful gain.
2. A piece of trickery; a trick.

Anyone that cheats on their tax return is committing tax fraud. They may not be formally charged with fraud by the IRS, but they are still committing fraud against the government. Not only are they cheating the government, they are also cheating each and every taxpayer that pays their fair share.

Some government agencies have cyber crime units, there are people that are looking for people that may be violating the laws of that agency. What you write on a public forum can be a dangerous thing.
Click to expand...
 
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Neil, sorry if I took it off- topic a little, but Smitty is just plain wrong again, and if I can keep someone from getting in trouble, even just one person, then it is worth it
 
Whatever you say Jerry

I'm not going to argue the point any farther here....I have had far more experience with tax audits than you seem to think though so don't assume I have "absolutely no experience" with audits.
 
I think the best way, is to nitpick all of your expenses particularly any time you use your vehicle, or document some place you stopped while on vacation and tried to sell some pens, or in my case tools as well, I'm not sure the Government goes out checking craft shows, art shows looking for the hobbyist trying to make a few bucks, (or loose a few)
I haven't prepared my own taxes for close to 25 years, I was 5 years with no filing, and decided I'd better find out what to do, I found the greatest Tax lady I'd ever had. she filed for the 5 years, we got back quite a bit, and have used her ever since.
With 60,000 pages of legalese that even the the lawyers can't get straight, Why the heck doesn't the government just take a percentage from every one, The same percentage, Corporations and business all the same. Then I don't think there would be as many people being afraid of the IRS Boogie man!!
OH Wait that would be too simple DUH
 
You said that right.

bitshird said:
I think the best way, is to nitpick all of your expenses particularly any time you use your vehicle, or document some place you stopped while on vacation and tried to sell some pens, or in my case tools as well, I'm not sure the Government goes out checking craft shows, art shows looking for the hobbyist trying to make a few bucks, (or loose a few)
I haven't prepared my own taxes for close to 25 years, I was 5 years with no filing, and decided I'd better find out what to do, I found the greatest Tax lady I'd ever had. she filed for the 5 years, we got back quite a bit, and have used her ever since.
With 60,000 pages of legalese that even the the lawyers can't get straight, Why the heck doesn't the government just take a percentage from every one, The same percentage, Corporations and business all the same. Then I don't think there would be as many people being afraid of the IRS Boogie man!!
OH Wait that would be too simple DUH
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You got that right - the truth is, if you read enough you will find that even the IRS doesn't know all of the rules, regulations and laws - the cases that go beyond tax court the IRS loses a substantial percentage.

They lose usually because they are misapplying the law and someone finally calls them on it.

Of course we also get cases that one US District Appeals Court decides for the IRS and another decides against. We then have the same law but not applied all over the country. Might hang that way for a few years until it goes to the US Supreme Court.

It is ironic that we who supposedly live in the freest country on the planet suffer with the most draconian tax laws in existance and the average citizen has virtually no rights - the iIRS is the only organization in the country that can sieze your assets by nothing more than claiming that you owe them money --- they don't have to prove it and they can tie up your assets so tight that you won't have the wherewithall to dispute their claim.
 
86% of the time the taxpayer loses in the Tax Court. If you lose here you do not go to the "US District Appeals Court", but you can go to the US District Court or the US Federal Court of Claims, If you lose in one of these courts, then you can appeal to the US District Court of Appeals, by now you have probably spent a fortune in legal fees, and more than the tax liability.

Sources:

http://blog.pappastax.com/index.php/2010/01/14/taxpayers-lose-86-of-tax-court-cases/

http://www.investopedia.com/articles/tax/09/tax-court-last-resort.asp#axzz1ZZvwyXr3

In the military there used to be a saying "Using free law advice will get you more time in the stockade". Same goes for free tax advice, instead of the stockade it gets you in the pocket book, but if charged with fraud, then it might also include a vacation to "Club Fed".
 
Selected data

dogcatcher said:
86% of the time the taxpayer loses in the Tax Court. If you lose here you do not go to the "US District Appeals Court", but you can go to the US District Court or the US Federal Court of Claims, If you lose in one of these courts, then you can appeal to the US District Court of Appeals, by now you have probably spent a fortune in legal fees, and more than the tax liability.

Sources:

http://blog.pappastax.com/index.php/2010/01/14/taxpayers-lose-86-of-tax-court-cases/

http://www.investopedia.com/articles/tax/09/tax-court-last-resort.asp#axzz1ZZvwyXr3

In the military there used to be a saying "Using free law advice will get you more time in the stockade". Same goes for free tax advice, instead of the stockade it gets you in the pocket book, but if charged with fraud, then it might also include a vacation to "Club Fed".
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You are absolutely correct the IRS does win a high percentage of cases at the Tax Court Level. But their record is not nearly as good in the US District Courts.

You do not have to start in Tax Court - you can begin in the District Court.

What you failed to mention is that one of the cited blogs also says that 90% of the cases that could be headed for Tax Court (cases where the taxpayer chalenges the IRS audit) never get there because they get settled before going that far, usually with the taxpayer getting at least a partial reduction in what the IRS demanded.
 
My mother-in-law is 82 and her Social Security check varies each year depending what she made in interest etc the previous year. As far as I know there is no age limit where they won't offset Social Security if the are making more than ($3000??) in other income.
 
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Not So

sgimbel said:
My mother-in-law is 82 and her Social Security check varies each year depending what she made in interest etc the previous year. As far as I know there is no age limit where they won't offset Social Security if the are making more than ($3000??) in other income.
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See Below --- I collect social security and have a retirement pension and have a fair amount of interest/dividends etc. I also file a Schedule C as does my wife. Your income from interest and dividends NEVER affect your social security check.

If you have other income that causes you to owe income tax, you can have a deduction for income taxes taken from your social security check...that is not a reduction in your SS benefit it is income tax withholding. Some people do that if they have dividend or interest checks that don't have any taxes withheld.

If you take social security benefits before full retirement age, and you earn income in excess of the annual earnings limit, your social security benefit will be reduced. (Keep in mind, investment income does not count toward the annual earnings limit; the only income that counts is earned income - the income you earn by working.)

In 2010 and 2011, the annual earnings limit is $14,160. That means you can earn up to $14,160 and your benefits will not be reduced. If you earn over $14,160 the amount of reduction you incur will depend on your age. (View current and past year's earnings limits).

Income Earned After You Reach Full Retirement Age


Once you reach full retirement age, you are no longer subject to the annual earnings limit; you can earn as much as you like without incurring a reduction in your social security benefits.
 
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