Hobby or business?

[A930Rocket]

Ms Rocket has a hobby of buying used furniture, rehabilitating as needed and selling it on the market place on Facebook, etc. she sells it out of our garage. No store front, booth, etc.

Her expenses are about $200 per week and she usually deposits $1k to $1.5k per week.

It’s all cash.

Anything to worry about?

[Amail]

As long as you don't post expenses and deposits on a public forum, you should be fine.

[freeform911]

I'm just down the road in Beaufort SC. Here the local codes would call that a business. And depending on what she makes at years end the IRS might also consider it a business.
Might want to check Charleston codes

[Rick Lee]

Mrs. Lee got a 1099 from PayPal for $30k one year for her "hobby" eBay sales. I'd say bank deposits are just as easy to track, if the gov't. wants to. And Ms. Rocket is netting plenty more than Mrs. Lee does.

[A930Rocket]

Originally Posted by amail

as long as you don't post expenses and deposits on a public forum, you should be fine.

Doh!

[A930Rocket]

Originally Posted by freeform911

I'm just down the road in Beaufort SC. Here the local codes would call that a business. And depending on what she makes at years end the IRS might also consider it a business.
Might want to check Charleston codes

I’m building houses just south of Beaufort in Oldfield Plantation off Okatie Hwy. It’s a long haul every day from Mount Pleasant and back.

[A930Rocket]

This hasn’t been going on very long. Just the last couple of months while she finished her doctorate and looking for a job

When she starts work, it will cut way back and maybe she’ll do just a few pieces of furniture on the weekends

[drkshdw]

Any time money changes hands the gov't wants their cut. If you earn more than $400 then the gov't classifies it as a 'business'.

[GH85Carrera]

Originally Posted by drkshdw

Any time money changes hands the gov't wants their cut. If you earn more than $400 then the gov't classifies it as a 'business'.

Yep. And they have zero sense of humor about it.

Form a LLC, get a Federal ID number. start paying 1/4 estimated taxes on all the income. Write off everything possible with the business. Pay the tax man. He is your partner is all profits. He never does any work to help, and he will vanish if the profits go away and you need some money.

If she is putting money into the bank, she has a paper trail they will find instantly.

[Jims5543]

Stop depositing in bank.

You have a gun safe? Deposit there.

Better yet, that is an ounce of gold a week with money left over to re-invest.

[Don Ro]

I sold something for 10 months...made over $36,000 in that time. Never deposited any of it...kept in a safe.
Paid cash for most things for years to come.
Why not do the same?

[wdfifteen]

Originally Posted by A930Rocket

Her expenses are about $200 per week and she usually deposits $1k to $1.5k per week.

It’s all cash.

Anything to worry about?

Only thing to worry about is getting caught, and the chances are low. But what she is doing is the definition of a business.

[A930Rocket]

Ms Rocket actually had a customer that worked for the IRS. He just laughed when he talked to her her. They might not be laughing if it ever hits hits the fan though

Saving the cash home might not be a bad idea.

Thanks!

[1990C4S]

You are 100% safe. Unless you post about it on the internet.

Stop using the bank. Spend the money bit by bit. Groceries, gas, restaurants, etc.

[Jims5543]

Originally Posted by A930Rocket

Ms Rocket actually had a customer that worked for the IRS. He just laughed when he talked to her her. They might not be laughing if it ever hits hits the fan though

Saving the cash home might not be a bad idea.

Thanks!

Not to get all Tabs in this thread.

Realizing how close the banks were to closing down in 2008 made me take some out and turn it into gold / silver / cash / guns / ammo.

[RKDinOKC]

When was a teen mowed yard and pocket about 150 a day profit. If someone paid with a check I cashed their check at a local grocery store not a bank. Also worked a very part time job to report to IRS and make check deposits from.

[tabs]

Originally Posted by GH85Carrera

Yep. And they have zero sense of humor about it.

Form a LLC, get a Federal ID number. start paying 1/4 estimated taxes on all the income. Write off everything possible with the business. Pay the tax man. He is your partner is all profits. He never does any work to help, and he will vanish if the profits go away and you need some money.

If she is putting money into the bank, she has a paper trail they will find instantly.

Keep all expense records...Cost of merch, gasoline (mileage), shipping, supplies, telephone, advertising, if you move something for her it is a labour expense. Even warehousing of merch, and work space is a cost of doing biziness (they are touchy about that and you have to be careful).

But then there is business license, tax accounting services, state resale #, and EPA or state compliance if she is using chemicals.

I would bet after all is said and done there won't be much real profit left...

I think but don't know anything about anything....it would be classified as a hobby business.

Pay Pal only sends out 1099's if you do over 20K a year. but again how would I know I am just some dumb smuck who lives in my mothers basement.

[tabs]

Originally Posted by Jims5543

Not to get all Tabs in this thread.

Realizing how close the banks were to closing down in 2008 made me take some out and turn it into gold / silver / cash / guns / ammo.

Ohhh God help me I am drawn to the sireens song...and can't help myself.

Long term you got real trouble right here in River City. Short to intermediate term you play the game...cash, da banks, equities, RE, Bonds are fine...(caveat unless there is a Black Swan).

5000 years of human history can not be wrong. Gold, Silver have been a universally recognized form of money/wealth. It ain't different this time, and you are not going to change that reality.* That said it would be propitious to have some tucked away for a rainy day.

*It has to do with the momentum of history, it is an ingrained belief that Gold and Silver have value. Saying it is different this time is like trying to say the course of the Colorado river has changed in the Grand Canyon..

[Chocaholic]

Here’s a crazy idea. Why not just pay the taxes that are owed and let her enjoy making some money with her hobby?

Honesty my friend. Honesty. Nothing to worry about that way.

[asphaltgambler]

Why spoil it? I mean seriously? As some have said above, with me agreeing from experience - stop regular deposits in your bank, put it in your safe and then covert some into commodities that will grow in value.