Sales Tax Question from a noob

I buy storage units and pay the taxes on the unit itself. I then hold garage sales and do craigslist to sell the merchandise.

Now I understand the importance of reporting everything you make to the IRS but I have never been to a garage sale where receipts are given and tax is charged. The same thing with craigslist.

Now I am a noob somewhat and I dont want to get in trouble but i am confused because im not running a business im just doing this as a hobby.

Just a little confusing

Not trying to suggest criminal activity, but if you declare that as income, you're nuts!
If you sold your lawnmower to your neighbor, would you report it?
If you were to open up a thrift store, that would be different.

Get a sales tax use permit if you don't already have one. This will allow you avoid paying taxes t pay tax on the unit when you purchase it. You have then have two options. You can either get a small cash register for your garage sales and charge sales tax or just subtract your tax rate from your net profit.

Not trying to suggest criminal activity, but if you declare that as income, you're nuts!
If you sold your lawnmower to your neighbor, would you report it?
If you were to open up a thrift store, that would be different.

The problem with that theory is that it will eventually catch up with you. It may take 15 years but when it does bite you in the a$$, you will regret not paying your taxes. Especially if you already have considerable wealth. If you own your cars and house and have money in the bank, why risk losing it all?

If you sold your own lawnmower for less than what you paid for it it would be considered a depreciated loss. Plus, you have already payed sales & income tax on that money you purchased it with.

Also, it depends on how you are buying. If you buy 1 unit every week or so and you're mainly doing it for fun, then you will be okay. But if you are bringing in over 10 grand a month like I was, you need to give Uncle Sam whats his before he takes whats yours.

The problem with that theory is that it will eventually catch up with you. It may take 15 years but when it does bite you in the a$$, you will regret not paying your taxes. Especially if you already have considerable wealth. If you own your cars and house and have money in the bank, why risk losing it all?

If you sold your own lawnmower for less than what you paid for it it would be considered a depreciated loss. Plus, you have already payed sales & income tax on that money you purchased it with.

Also, it depends on how you are buying. If you buy 1 unit every week or so and you're mainly doing it for fun, then you will be okay. But if you are bringing in over 10 grand a month like I was, you need to give Uncle Sam whats his before he takes whats yours.

I like to add something to that. You can get all your licenses, permits, name registration, and all. But in the eyes of the IRS, if you are not bringing in X amount of money per quarter, then truthfully this is considered a hobby, therefore not even having to pay taxes on it, other than when you are buying a unit. Check with the IRS, local state and city laws, or a CPA. They can all tell you the details.

You still have to file though. And as long as the money has been reinvested, you wont have to pay income tax.

However, on the deferred sales tax, you have to pay taxes on what you sold even if you didn't make a profit.

The problem with that theory is that it will eventually catch up with you. It may take 15 years but when it does bite you in the a$$, you will regret not paying your taxes. Especially if you already have considerable wealth. If you own your cars and house and have money in the bank, why risk losing it all?

If you sold your own lawnmower for less than what you paid for it it would be considered a depreciated loss. Plus, you have already payed sales & income tax on that money you purchased it with.

Also, it depends on how you are buying. If you buy 1 unit every week or so and you're mainly doing it for fun, then you will be okay. But if you are bringing in over 10 grand a month like I was, you need to give Uncle Sam whats his before he takes whats yours.

My post was in response, to him stating that this was a hobby. I whole heartedly agree, that if you are knocking down 10K per month, you'd better be paying taxes on it. Unless you're burying cash in the back yard , in a coffee can!

Ive only bought two units this year and had three garage sales that have made 200-300 dollars each. Not to mention that these garage sales have included my own stuff.

Im just wondering how much can I make before I go through the process of paying taxes on it? I dont want to spend money getting all the paperwork and buying a cash register when I haven't  even made a grand yet.

Ive only bought two units this year and had three garage sales that have made 200-300 dollars each. Not to mention that these garage sales have included my own stuff.

Im just wondering how much can I make before I go through the process of paying taxes on it? I dont want to spend money getting all the paperwork and buying a cash register when I haven't  even made a grand yet.

Just contact your local IRS office and ask them, that is were you can get a precise answer.

It varies depending on your deductions. However, you still have to file. If you aren't making a lot of money, chances are you won't owe anything, especially if you document your expenses well. What is the current mileage deduction nowadays?

One year I made slightly over 40K and I claimed 70K miles and I actually didn't owe a penny.