Storage Auctions

Business Info Needed

Business Info Needed
« on: October 11, 2011, 11:40:05 PM »
A friend of mine that owns a tax service asked me if I have a business license and if Iím keeping track of everything I buy and sell.

I am keeping track but I havenít really had intentions of turning this into a legit business.
Has anyone heard that itís necessary? I have a job and Iím a student so in my mind this was just a fun way to make some extra money.

She said that if you make more than $600 in a year the IRS requires a business license. I guess the storage place reports the auction winners and eBay reports their sales so there is a paper trail of the purchase and sale of each item.


I asked her about deductions and she said all these things are deductible plus more.
1) Cellular telephone bills and a portion of a land-line if applicable
2) Vehicle Gas, repairs and interest on car loan OR mileage.  This one requires greater explanation but mileage is usually better.
3) A portion of your rent and household utilities.
4) Bank Charges.
5) Internet Service.
6) Newspapers & any other advertisement purchase source to locate storage units or auctions.
7) Clothing attributed to this business,  gloves, jeans, t-shirts, etc.
8) Shipping, Freight & postage fees
9) Packing & shipping materials
10) Office supplies

Do you guys have business licenses? Do you think is it something I need to consider?

Offline jrossjr79

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Re: Business Info Needed
« Reply #1 on: October 12, 2011, 12:07:12 AM »
At this moment in time I do not have a business license myself. Although I do plan on taking care of that. And I do not know the legalities of it.

As far as the storage facilities reporting it. No way of proving it was you. With all the places I been, only one place has ever asked to get a copy of my Drivers License, and none has ever asked for my SSN.

However, if you get your sales tax permit, which I urge you to get, then for sure it will be documented that it was you that bought a locker their. That is the downside. The positive is you will not be paying the taxes on the locker you buy.

Hope this helps.

Re: Business Info Needed
« Reply #2 on: October 12, 2011, 12:50:29 AM »
If your more than an occassional seller. Especially like a flea market if you sell more than 3 days or more than 10k u must obtain a state resellers licence an need to pay taxes.

Re: Business Info Needed
« Reply #3 on: October 12, 2011, 07:54:31 AM »
A business license may or may not be required by your state or local government. A business license is not required by the IRS.

Offline Cobia

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Re: Business Info Needed
« Reply #4 on: October 12, 2011, 08:10:38 AM »
I have a business license. Just my opinion, but I believe you can only grow your income/business so far doing it "under the radar".

Re: Business Info Needed
« Reply #5 on: October 12, 2011, 05:24:45 PM »
I have a business license. Just my opinion, but I believe you can only grow your income/business so far doing it "under the radar".

What exactly do you mean? You think its best to stay "under the radar" to make money? I'm fairly new at this so I'm not even sure its something I want to turn into a business.

What made you choose to get the business license?

Offline Cobia

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Re: Business Info Needed
« Reply #6 on: October 13, 2011, 08:06:00 AM »
You can run everything through your schedule C on your tax return without having a business, some of the reasons why I registered as a business are:

mitigate liability, establish lines of credit, business expenditure tax deductions, quicker growth potential (hire employees, open retail store, etc.) I have already found that there are other potential businesses that dovetail from doing storage auctions, for instance operating an auction house, operating a foreclosure cleanout business, etc. It just makes sense to me to be established in case any of these or other opportunities presents itself so I can move on it much quicker.

Depending on your local laws, you may not need a "business license" for your operation, but a resale certificate would probably be helpful.

Offline bwd111

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Re: Business Info Needed
« Reply #7 on: October 13, 2011, 02:50:02 PM »
Ive never had to give my address to a storage company before! So good luck making me pay taxes on stuff I havent sold. And If I keep stuff for myself what IRS is going to tax me on that. What about the tax you pay the storage company for the lockers. HMMMMMMMMM

Offline bwd111

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Re: Business Info Needed
« Reply #8 on: October 13, 2011, 02:52:45 PM »
If your more than an occassional seller. Especially like a flea market if you sell more than 3 days or more than 10k u must obtain a state resellers licence an need to pay taxes.
In my state you are only allowed 5 yard sales a year. More than that you need a bussiness lic.

Roadvirus

Re: Business Info Needed
« Reply #9 on: October 17, 2011, 09:47:06 PM »
In my state you are only allowed 5 yard sales a year. More than that you need a bussiness lic.

And how exactly are they going to know you're holding a yard sale? Do they have some overpaid flunky going through all the newspapers looking under "garage/yard sales" and making a check mark next to your name on a piece of paper? Doubt it. Talk about overreaching of the government.

Offline ChefJ

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Re: Business Info Needed
« Reply #10 on: October 17, 2011, 10:06:14 PM »
A friend of mine that owns a tax service asked me if I have a business license and if Iím keeping track of everything I buy and sell.

I am keeping track but I havenít really had intentions of turning this into a legit business.
Has anyone heard that itís necessary? I have a job and Iím a student so in my mind this was just a fun way to make some extra money.

She said that if you make more than $600 in a year the IRS requires a business license. I guess the storage place reports the auction winners and eBay reports their sales so there is a paper trail of the purchase and sale of each item.


I asked her about deductions and she said all these things are deductible plus more.
1) Cellular telephone bills and a portion of a land-line if applicable
2) Vehicle Gas, repairs and interest on car loan OR mileage.  This one requires greater explanation but mileage is usually better.
3) A portion of your rent and household utilities.
4) Bank Charges.
5) Internet Service.
6) Newspapers & any other advertisement purchase source to locate storage units or auctions.
7) Clothing attributed to this business,  gloves, jeans, t-shirts, etc.
8) Shipping, Freight & postage fees
9) Packing & shipping materials
10) Office supplies

Do you guys have business licenses? Do you think is it something I need to consider?


ask your friend when ebay started reporting to the IRS...  As of now that technology hasn't been completely worked out.

Offline MovieMan

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Re: Business Info Needed
« Reply #11 on: October 17, 2011, 11:25:43 PM »
And how exactly are they going to know you're holding a yard sale? Do they have some overpaid flunky going through all the newspapers looking under "garage/yard sales" and making a check mark next to your name on a piece of paper? Doubt it. Talk about overreaching of the government.

If it's like most municipalities they are doing it to protect the neighborhood environment more than anything else.

In my area one is limited to TWO yard or garage sales a year.

NO, the government doesn't monitor it OTHER THAN to listen to complaints of neighbors who would get tired of the traffic, the crossing of lawns, the blocking of driveways, etc by shoppers.  If someone is doing it a few weekends a month, month in and month out, it WOULD be a problem in my book.


Offline alloro

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Re: Business Info Needed
« Reply #12 on: October 18, 2011, 12:51:12 AM »
She said that if you make more than $600 in a year the IRS requires a business license. I guess the storage place reports the auction winners and eBay reports their sales so there is a paper trail of the purchase and sale of each item.

Unless you're issued a 1099 by someone, then there's no paper trail leading to or from the IRS. The storage place only knows what you paid for the unit, not how much you sold the contents for. What you paid is a deduction, not income. I don't know why your "friend" would try and upset you like that. But keep in mind, there is a reward issued by the IRS to anyone that turns someone in for underpaying any taxes. So treat your money business like I do, I trust no one and share all information only with me, myself, and I.

FYI, bragging on here doesn't count. ;)


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