I'm forgetting the name of the guy (but it was an IRS/Finance related gov big whig) who in a recorded senate hearing on IRS always pursuing the small guy; and the individual outright said that it was a strategy because it was too expensive to go after the guy with 1mil -100bil, and the audit and IRS fine on the dude that makes only 20-60k is going to yield more consistent income for the IRS. ...Tragic the approach that has arisen (especially if you were to take inflation from 1950-current into account) that $600 is NOT what it was in 1950, it isn't what it was even in 2000.
it was also mentioned in his previous video and he said he here as well. It's just an easy way for the government to generated small amounts of income over a large population boosting the tax revenue.
Exactly, and the trend towards removing paper cash transactions from being a viable way to pay for things means there is a record of almost everything you buy and sell. In the UK they even tax favours (favors) and I'm not kidding on that one. If you do what is called 'work in kind' you must value that work and declare it as income, under the assumption that the person you have done the work for owes you that amount. Cash is still the king for me and the tax man hates it.
I think is also has to go into the efficiency of the enforcement. To go after the “big boys” it will take much more time and will be much less efficient in their recovery of funds for the government. Where as the little guy is just going to pay it because they don’t have the financial resources or know how to fight. I don’t like it any more than the next guy but I must accept the world the way it is not the way I wish it to be.
That is why, Rich people cant afford it, money means nothing, when you live in a big mansion, with an empty fridge, poor people have endless piles of food, water & ammo, come at us, if you dare 😬🇩🇰❤️
I work in claims, I have for the past decade. 90% of all claims submitted to our office are automatically approved by the computer with no need for human touch from my team. If the claim comes in an is missing a document, the system flags that claim and my team handles it personally. This is how I suspect the tax audits happen as you discussed
This happened to me with an insurance pre-approval. They automatically declined everything and then had to manually approve it months after I received a $6k bill lol
Politicians paid for by corporations. Working towards a system that makes it harder and harder to regulate and enforce wealthy entities, so the government "has to" go after small fries. Sad.
The average person probably wont even realize that the 1099-k doesnt factor in fees/taxes collected by partner/etc, and that you have to manually subtract that from the total. Track your purchases, especially if you open booster boxes, all of that is part of your cost basis, for most people who open boxes to hunt singles you can likely zero out and claim net-negative. Government is shiesty these days
Supposedly they might pass a new bill to change it back to $10,000 in sales before you need to file a 1099 which would make a lot more sense to go down from $20,000 to. Also it’s nervy for them to do this considering all the inflation, $600 doesn’t even go as far
Which is still bullshit. It's the bait and switch. They drop it down to 600 and then raise it to 10k so you don't feel as enraged. But in the end, they're still fucking you over.
It's all about pulling income out from the middle. Wages have been stagnate from 1999 to 2015. So when wages started to rise faster from 2016-2019 through had to find a way to tap on the breaks. It's just a convince that something came out of China again (At this point that nation should be on perma quarantine) . So now what we are seeing is one political party pushing wages down via inflation so people go back to being Just over broke.
If they are asking people to pay taxes they ACTUALLY KNOW those people don't really owe... then it is dishonest. And who even says it's morally right to tax you on items you sell. I mean... think about it for a second. You paid income taxes when you made the money. You paid sales tax when you bought the item. That's already being taxed twice on the same item... After many years THEY print a ton of money making prices skyrocket. You eventually sell the asset for more dollars then before, and they tax you a THIRD time? How dare you actually buy an item that went up in value?!? When does inflation come into the mix? What if the real value of the item you sold is LOWER in purchasing power today then it was 20 years ago? But based on inflation the number looks higher. So they are just taxing their own inflation. It IS dishonest Rudy. They ARE dirty cheaters.
Not to mention, the person who buys the item from you also pays sales tax on said item. It’s pure theft and wars have been fought over less. At what point do we say, “enough is enough”?
Also the person trying to make money is taking all the risk. This is also assuming the person is gaining money. What if Timmy buys a case for $800 to hold onto then life happens during a correction and he sells it for $601? Better have receipts to prove your loss..
@Unhinged Magi exactly. Taxing their own inflation. By making the dollar less valuable they create an artificial price increase and can tax everyone on the difference between the 2. They are literally using inflation to create additional tax revenue. It works for Houses and real estate and will work for whatever else they want it to. Scumbags
Setting the threshold to $600 is comical. The addition of state sales tax to internet transactions still angers me. We aren't in 2010 anymore. Thirty trillion in national debt plus another $165 trillion in unfunded liabilities? I don't think it is possible to tax people enough to get out of this. Whoever gets stuck holding dollars at the end is not going to be happy.
I read a report that said if you tax everyone in the USA at 100% it would still take the country years to pay off its national debt. The national debt average is somewhere around $90,000 per citizen in America. Half of the citizens pay nothing in taxes so the average taxpayer owes about $200,000 to cover the debt and rising. Taxes continue to go up, but spending continues to go up faster. The government does not have an income problem, it has a spending problem. At this point its literally impossible to tax themselves out of debt.
Poor people don't have the financial resources to fight, so the IRS and gov't et al, go after them more often (per capita). It's twisted and sinister, but so is the gov't.
I genuinely think that the change will drive cash transactions for people who have that option and may make it much less profitable to do business for everyone else
@@kethmarhkfy7luf.263 pretty sure you would have had to purchase it same year to call it a 1400 loss. Bought it 3 years ago? that's 2K profit as far as the irs man is concerned.
these are my favorite types of videos from you. these talking about finance but in a context that affects magic players and collectors in well informed way. you have money but look out for others
It's just simply a waste of resources. I cannot imagine it being worth the man-hours to pursue this plan of action. But like you said, poor people, especially poor people that get audited, will say 'yes sir' and pay whatever amount the IRS deems fit or unpaid. They cannot afford to fight or question their decision and just pay it. Farming the poor and uneducated and its a slap in the face to people trying to better themselves, get out of debt and survive by selling already taxed goods.
@@TriWaZe Holy shit where? My blood boiled and jaw dropped even thinking this is happening. Like: "Yeah, I had to get this license to sell these old-ass shirts for $0.50 a piece......"
Sad thing is that they would probably bring this up for a repeal and they'll complain that used to be 20K and is now 600 - that doesn't seem fair and restructure it down to 100.
People will have to go to Conventions etc and do real life of the book trading.. I'd say do the sells in Crypto, but I'm pretty sure that is already taxable in the US despite the SEC being unable to decide what a Crypto is. Sounds like a mess I own thousands of cards. No idea what I paid as it sells for whatever it's worth when i want to sell it. Taxes here are always 21% so if you sell a card at 600euro it's -21% Not to mention I'm sure this is going to criminalise people who aren't crooks. Simply because they don't understand
New Jersey already had a $1k threshold for 2021 that I didn’t know about, so I was surprised when Ebay reported me to the IRS for selling my used games sold at a loss that I didn’t want anymore. Now I have to debate whether I want to spend my personal time learning how to do this on my tax return, or just pay the ordinary income tax on it and move on with my life. They know most little guys would do that. It’s a complete cash grab on garage sales.
This really hits me hard. I’m one of those people. My wife works during the day. I watch my kids during the day while she works, then work 50 hours a week overnight, while also trying to do a little side hustle. It really feels like I’m just being pushed down even further down than before. It’s crazy.
That's been my biggest problem with this change. The people that sell for $600 or $1000 don't typically have the paper trail and don't know how to go about claiming things. I've sold quite a few disc golf discs, I don't sell for a big profit, but as far as claiming what was paid for the discs...most came in mystery boxes. Do you say "well, i bought a box with 8 discs and paid $130, so divide that by 8 and I paid $16.25 per disc, or do you look at msrp on the disc? The problem with just dividing the cost of the box, is that different discs are priced differently. If the IRS came back and said "prove to me what you spent." I don't have receipts for some of the things I bought long ago. Also, How would I show proof of what I paid for something that was bought in a bulk box?!? This also becomes a lot of work for someone who's doing it on the side and isn't really making much money off of it. I know it will never happen, because the government wants money, but the only thing we should be taxed on is things that we buy. We shouldn't be taxed for making money. The government is taking 20-30% from your income, then turning around and taking 6, 7, 8% on purchases. Then on top of that, they push higher wages. "We're trying to help the lower class." In reality, the only people they are hurting are the lower and middle class. Higher wages cause inflation to go up faster. When inflation goes up, it gives individuals less buying power with their money. They think they are sitting better, because they now have more money, but that money now buys less than it did before. This is great for the government, because it moves people up into higher tax brackets, causing them to pay more in taxes. Inflation as taught in school , is needed. In reality, what good does inflation really cause. I know this is long winded, but it just baffles me the thought process some people have about taxes and how everyone just needs to bend over, take it in the rear and keep their mouth shut.
It's becoming really difficult for people to take off and compete with generational wealth these days, especially when government keeps going after broke people.
This is very informative and helpful thank you. Although this is the first year I will get a 1099-k I have no clue what to do with the cost basis part. I have records of what I paid for the collections I buy since I use Facebook for the orders I have shipped and the same for eBay collections I buy. But how in the world do I write my cost basis if I sell 20-30 cards individually form the listing or bulk stuff together from multiple collections. Should I say every card costs the price I paid for the collection or just say 0 and eat the full cost, since I can’t prove 100% which card came out of each collection. Guess I should talk with the live tax agents on turbo tax when I finish getting my together. I should have went with being a cat this year instead of selling cardboard I heard cats don’t pay taxes.
You can either claim the purchase as a one time expense for the year (the easy way) or you can break down the cost to a per card basis, and claim that expense when the card sells - be it this year, or 5 years from now. But you have to be able to track that individual card. This is why sometimes you get a card in a sleeve with a upc or serial number on it. It is a lot of datakeeping and spreadsheeting. You have to document every card, every purchase, every sale. This is not to be taken as tax advice. See an accountant.
Thank You Rudy!!!! Sticking up for the little guy Im screwed, private cash sales, I will have to become a trader rather than a seller. Meaning I can't buy as much new product.
What I've also heard is that billionaires, honestly, just don't really make mistakes. They pay accountants and lawyers on retainer to ensure every penny they earn, spend, and invest is done so to the letter of the law. Whereas a mom & pop small business will probably mess up a few grand a year just cause they're trying to run a barber or a card store - they aren't super litigious with their paperwork.
It isn't a tax on the item though. That would be a sales tax. The tax is on any profit you make from selling something. The profit is being taxed, not the item.
Your employer pays taxes to pay you, then you pay taxes to receive it, then pay taxes to spend it, then whoever you bought stuff from pays taxes for selling it. Taxes up the ass
@@pinoarias8601 still two taxes?? If you sell something, for a profit, then you have income and income gets taxed. It has always been this way. Only difference now is it's harder for people to hide it if they use third party payment processors.
I guess this means stores will now offer even less on the dollar for your cards/collections because your selling profit (less tax) has just dropped 30%.
One positive thing about this is you don't pay federal taxes on long term capital gains under 41k in a year which most collectible items you sell on ebay would add up to less than that total. Just make sure you had the collectible for at least a year before selling it for the long term capital gains tax rate. A 700 dollar card you bought 3 years ago would be taxed at $0 for me in WA state at least.
I am by no means an expert, but I'm pretty sure this is a Federal policy. It doesn't matter what state you are in. Additionally, this income is being reported on a 1099-K not the 1099-DIV or the 1099-B, meaning it is being treated as normal income/sole proprietor/pass through income, that is taxed at your normal tax rate of whatever tax brackets you are subject to. Unfortunately, while our community likes to think of these as an asset class that should be considered a normal investment, the IRS has pretty strict requirements about what can and cannot be reported as what type of income.
it might be because, smaller quantities, when added up, amount to a lot. That makes more sense to me personally than this whole the government is out to get each and every smaller vendor.
I was an independent contractor for a bunch of theatre companies at one point in my life. I once had like, 19 or 20 1099’s I had to input. It was a major pain in the ass, but I still had to do it
I remember exactly how much my cards cost me especially my power. That way I can rub it in everyone’s face because I I never threw away my toys from childhood. 😂😘
It does ask you and the people if the item sold. They can see the numbers if they actually wanted to. Unless you just have $1 on everything and have them text your number. I doubt they would go to that extreme though.
Until the IRS computers notice your expenditures exceed your income. Then you might get some uncomfortable questions on how you managed to make $40K, but spent $60K, yet you don't have 20K in debt... Have fun.
The reason why the government targets the little guy is because those people don't fight back, they just pay fines. So rather than sinking cost into getting big fish they spend nothing on form letters and trash the underclass. IRS in a nut shell.
the rich have time to fight back. they dont have to work. if they've got businesses and can close down without being affected of course they will fight for their money because they dont have to punch a clock. the little guy might not have the time to check the government on the one or two days that he's off from work.
doesn't have to be your opinion. i believe they admitted, recently, that they don't go after people with money because those people can afford lawyers.
The government needs money because they spend way more than we ever gave them. Of course they come after the little guy, it was never about helping the little guy.
First off Rudy for President!! I'm an Australian and I would still vote for you.. At the end when you were saying it feels "off" and "dirty" in Australia we have a saying. "Does it pass the pub test?" This saying is even applied to politics. anyways love the vids and keep it up young man
One of the best videos in a while and spot on. If selling, try to move to marketplace and deal with cash to avoid getting hosed. Obviously though, not nearly as great amount of exposure to what you're selling.
This is why I stopped selling on ebay when they said they wouldn't allow sellers to accept money through paypal. They wanted your direct deposit banking information. Immediately I knew taxes were coming, and there was going to be no choice but to pay.
Well obviously poor people are easier to target. They don't have money to fight back, lobby, etc. One could say it cost several hundred dollars to keep the card in good condition, thus negating the profit I'd think.
@@ProudCommie lol. Well capitalism, inherently, isn't evil or bad. The reason even small income families can own a home and get material things such as a TV for $100 or a toaster for $5, things that were considered luxury back in the day, is due to capitalism. Striving to make more, build more, own more can be considered evil or toxic BUT is also not inherent bad or wrong. That feeling of wanting more for one's self is the same feeling that takes a single individual living on a couch sharing rent with five people to a millionaire living the high life. That idea, might I add, can't be done in some countries. It can still be done freely in America. The old saying "we get what we put in" still holds water here. Just finding the balance of life and work is the real question. How much life are you willing to sacrifice to reach your goals to financial success. As a reminder, not all of us will get a equal amount in life. That's not realistic. That's fantasy. Back on topic, Capitalism gets corrupt by greed. Sadly, for many who do become successful greed very well takes hold. That's the issue from my perspective.
Taxes and accounting in general can be a bit tricky. For instance what is the cost basis for a card you pulled out of a pack? Especially if you paid good money for an older booster box or pack. For starters a pack has X number of cards and it's possible to make a profit (or loss) by opening it, ie. you might pay $100. for the pack but then score a mythic rare that is worth $700. If that's the only pack that you opened that year, do you have to pay taxes on the $600. gain the same way gambling earnings can be taxed? And when computing basis, how do you split that $100. into basis for each card (since the pack has multiple packs?) The accounting honestly sounds like a can of worms! The same is true about cards that were part of trade deals and such. If you did a trade deal with some guy, and you traded cards with a market value of $400. for cards with a market value of $600., do you have to pay taxes on the $200. gain as barter income or such?
Got shook down for over $200 bucks they said they overpaid my student grant for school. Fun fact. If you decide to fight them and lose your bill continues to accrue interest.
And this is why i feel so lucky to be in Australia. Noone here pays any tax at all on any income under $19,000 per year. Tax brackets kick in after that. It's absurd that the US taxes poor people and still doesn't provide universal healthcare or interest-free student loans. Still a second-world cesspool.
Yeah the government needs money because they're spending it faster than me going to the bathroom after having Taco John's. The rich get richer the poor get poorer.
It’s corrupt. That’s all it is. If I decide to sell my sneaker collection that I already paid taxes on, why do you get a cut off the top of me just trying to recoup my money from stuff I just don’t want anymore? That’s double dipping and it’s unfair.
Why have you not formed a S-Corp? You’ll save money on your Self Employment Tax… S Corps force you to pay a “reasonable salary” which is the only income that is subject to the 15.3%. All leftover profits are only subject to federal income tax.
How about using a Streamlined Sales Tax Agreement Certificate of Exemption and / or an E-595E Streamlined Sales and Use Tax Agreement Certificate of Exemption?
I knew going in to selling some of my collection, that I was just moving money around. I need profits to pay rent, and I'll give back that 'loan' next year to the govt. At this point, making money(net profits) is just a temporary loan from the government.
I'm forgetting the name of the guy (but it was an IRS/Finance related gov big whig) who in a recorded senate hearing on IRS always pursuing the small guy; and the individual outright said that it was a strategy because it was too expensive to go after the guy with 1mil -100bil, and the audit and IRS fine on the dude that makes only 20-60k is going to yield more consistent income for the IRS.
...Tragic the approach that has arisen (especially if you were to take inflation from 1950-current into account) that $600 is NOT what it was in 1950, it isn't what it was even in 2000.
it was also mentioned in his previous video and he said he here as well. It's just an easy way for the government to generated small amounts of income over a large population boosting the tax revenue.
Exactly, and the trend towards removing paper cash transactions from being a viable way to pay for things means there is a record of almost everything you buy and sell. In the UK they even tax favours (favors) and I'm not kidding on that one. If you do what is called 'work in kind' you must value that work and declare it as income, under the assumption that the person you have done the work for owes you that amount. Cash is still the king for me and the tax man hates it.
The only senate hearing I remember is the Italian one where Final Fantasy porn started playing on their screen.
I think is also has to go into the efficiency of the enforcement. To go after the “big boys” it will take much more time and will be much less efficient in their recovery of funds for the government. Where as the little guy is just going to pay it because they don’t have the financial resources or know how to fight.
I don’t like it any more than the next guy but I must accept the world the way it is not the way I wish it to be.
Look into who gutted the IRS budget to create the current sorry state of affairs
It’s expensive to be poor.
That is why, Rich people cant afford it, money means nothing, when you live in a big mansion, with an empty fridge, poor people have endless piles of food, water & ammo, come at us, if you dare 😬🇩🇰❤️
I work in claims, I have for the past decade. 90% of all claims submitted to our office are automatically approved by the computer with no need for human touch from my team. If the claim comes in an is missing a document, the system flags that claim and my team handles it personally. This is how I suspect the tax audits happen as you discussed
Your job is too boring for you to describe to others.
This happened to me with an insurance pre-approval. They automatically declined everything and then had to manually approve it months after I received a $6k bill lol
Medical claims? Did it for 7-8 years on the provider side mostly.
Not a day goes by that I don't remember the Great Hamster-Gerbil War of 1800. What an era.
Politicians paid for by corporations. Working towards a system that makes it harder and harder to regulate and enforce wealthy entities, so the government "has to" go after small fries. Sad.
The average person probably wont even realize that the 1099-k doesnt factor in fees/taxes collected by partner/etc, and that you have to manually subtract that from the total. Track your purchases, especially if you open booster boxes, all of that is part of your cost basis, for most people who open boxes to hunt singles you can likely zero out and claim net-negative. Government is shiesty these days
Basically the IRS is a fisherman going for swarms of Timmy Tuna rather than trying to harpoon Moby Rudy.
Supposedly they might pass a new bill to change it back to $10,000 in sales before you need to file a 1099 which would make a lot more sense to go down from $20,000 to. Also it’s nervy for them to do this considering all the inflation, $600 doesn’t even go as far
Which is still bullshit. It's the bait and switch. They drop it down to 600 and then raise it to 10k so you don't feel as enraged. But in the end, they're still fucking you over.
It's all about pulling income out from the middle.
Wages have been stagnate from 1999 to 2015. So when wages started to rise faster from 2016-2019 through had to find a way to tap on the breaks. It's just a convince that something came out of China again (At this point that nation should be on perma quarantine) . So now what we are seeing is one political party pushing wages down via inflation so people go back to being Just over broke.
@@everyonethinksyoureadeathm5773 Thanks Obama!
@@everyonethinksyoureadeathm5773 quarantine for a cold? or because they have fauci's wuhan lab?
I love when Rudy titles “poor people”
If they are asking people to pay taxes they ACTUALLY KNOW those people don't really owe... then it is dishonest.
And who even says it's morally right to tax you on items you sell. I mean... think about it for a second. You paid income taxes when you made the money. You paid sales tax when you bought the item. That's already being taxed twice on the same item... After many years THEY print a ton of money making prices skyrocket. You eventually sell the asset for more dollars then before, and they tax you a THIRD time? How dare you actually buy an item that went up in value?!?
When does inflation come into the mix? What if the real value of the item you sold is LOWER in purchasing power today then it was 20 years ago? But based on inflation the number looks higher. So they are just taxing their own inflation.
It IS dishonest Rudy. They ARE dirty cheaters.
Not to mention, the person who buys the item from you also pays sales tax on said item. It’s pure theft and wars have been fought over less. At what point do we say, “enough is enough”?
Also the person trying to make money is taking all the risk. This is also assuming the person is gaining money. What if Timmy buys a case for $800 to hold onto then life happens during a correction and he sells it for $601? Better have receipts to prove your loss..
@Unhinged Magi exactly. Taxing their own inflation. By making the dollar less valuable they create an artificial price increase and can tax everyone on the difference between the 2. They are literally using inflation to create additional tax revenue. It works for Houses and real estate and will work for whatever else they want it to. Scumbags
You should get a tax refund on every item sold below buying price 🤣
People thought those stemmy payments were gunna be free money lmao.
Setting the threshold to $600 is comical. The addition of state sales tax to internet transactions still angers me. We aren't in 2010 anymore. Thirty trillion in national debt plus another $165 trillion in unfunded liabilities? I don't think it is possible to tax people enough to get out of this. Whoever gets stuck holding dollars at the end is not going to be happy.
I read a report that said if you tax everyone in the USA at 100% it would still take the country years to pay off its national debt. The national debt average is somewhere around $90,000 per citizen in America. Half of the citizens pay nothing in taxes so the average taxpayer owes about $200,000 to cover the debt and rising. Taxes continue to go up, but spending continues to go up faster. The government does not have an income problem, it has a spending problem. At this point its literally impossible to tax themselves out of debt.
Poor people don't have the financial resources to fight, so the IRS and gov't et al, go after them more often (per capita). It's twisted and sinister, but so is the gov't.
Poor people 2.0
I'm in this video and i don't like it....
“Should we get the party pack or go to chip-potel?” oh that got me good lol!
I genuinely think that the change will drive cash transactions for people who have that option and may make it much less profitable to do business for everyone else
@@kethmarhkfy7luf.263 pretty sure you would have had to purchase it same year to call it a 1400 loss. Bought it 3 years ago? that's 2K profit as far as the irs man is concerned.
@@threefortytwo23 No, but he would have had to amortize the losses annually. You don't get to save them all up and then lump sum it.
these are my favorite types of videos from you. these talking about finance but in a context that affects magic players and collectors in well informed way. you have money but look out for others
It's just simply a waste of resources. I cannot imagine it being worth the man-hours to pursue this plan of action. But like you said, poor people, especially poor people that get audited, will say 'yes sir' and pay whatever amount the IRS deems fit or unpaid. They cannot afford to fight or question their decision and just pay it. Farming the poor and uneducated and its a slap in the face to people trying to better themselves, get out of debt and survive by selling already taxed goods.
Nowadays you can get very far automatically sending forms and letters.
Just look at scammers etc
Bruh it takes our company 18 PAGES TO PRINT 1 PAGE CHECK, and they won’t change it because they say it’s too difficult to do or cost too much 😂
The government no longer works for the people. Hasn't for many decades.
We live in a weird corporate monarchy.
Next they'll be going after people having garage sales and not paying taxes to the government
what they dont kno wont hurt them
@@TriWaZe Holy shit where? My blood boiled and jaw dropped even thinking this is happening. Like: "Yeah, I had to get this license to sell these old-ass shirts for $0.50 a piece......"
Rudy audited his parents at age 8
Sad thing is that they would probably bring this up for a repeal and they'll complain that used to be 20K and is now 600 - that doesn't seem fair and restructure it down to 100.
People will have to go to Conventions etc and do real life of the book trading..
I'd say do the sells in Crypto, but I'm pretty sure that is already taxable in the US despite the SEC being unable to decide what a Crypto is. Sounds like a mess I own thousands of cards. No idea what I paid as it sells for whatever it's worth when i want to sell it. Taxes here are always 21% so if you sell a card at 600euro it's -21%
Not to mention I'm sure this is going to criminalise people who aren't crooks. Simply because they don't understand
New Jersey already had a $1k threshold for 2021 that I didn’t know about, so I was surprised when Ebay reported me to the IRS for selling my used games sold at a loss that I didn’t want anymore. Now I have to debate whether I want to spend my personal time learning how to do this on my tax return, or just pay the ordinary income tax on it and move on with my life. They know most little guys would do that. It’s a complete cash grab on garage sales.
I will now herby refer to my favorite burrito place as CHIP-O-TILL. Many tacos to you Rudy!
This really hits me hard. I’m one of those people. My wife works during the day. I watch my kids during the day while she works, then work 50 hours a week overnight, while also trying to do a little side hustle. It really feels like I’m just being pushed down even further down than before. It’s crazy.
My g first respect hope everyone has great year
That's been my biggest problem with this change. The people that sell for $600 or $1000 don't typically have the paper trail and don't know how to go about claiming things. I've sold quite a few disc golf discs, I don't sell for a big profit, but as far as claiming what was paid for the discs...most came in mystery boxes. Do you say "well, i bought a box with 8 discs and paid $130, so divide that by 8 and I paid $16.25 per disc, or do you look at msrp on the disc? The problem with just dividing the cost of the box, is that different discs are priced differently.
If the IRS came back and said "prove to me what you spent." I don't have receipts for some of the things I bought long ago. Also, How would I show proof of what I paid for something that was bought in a bulk box?!?
This also becomes a lot of work for someone who's doing it on the side and isn't really making much money off of it.
I know it will never happen, because the government wants money, but the only thing we should be taxed on is things that we buy. We shouldn't be taxed for making money.
The government is taking 20-30% from your income, then turning around and taking 6, 7, 8% on purchases. Then on top of that, they push higher wages. "We're trying to help the lower class." In reality, the only people they are hurting are the lower and middle class. Higher wages cause inflation to go up faster. When inflation goes up, it gives individuals less buying power with their money. They think they are sitting better, because they now have more money, but that money now buys less than it did before. This is great for the government, because it moves people up into higher tax brackets, causing them to pay more in taxes. Inflation as taught in school , is needed. In reality, what good does inflation really cause.
I know this is long winded, but it just baffles me the thought process some people have about taxes and how everyone just needs to bend over, take it in the rear and keep their mouth shut.
It's becoming really difficult for people to take off and compete with generational wealth these days, especially when government keeps going after broke people.
Thats their goal
This is very informative and helpful thank you. Although this is the first year I will get a 1099-k I have no clue what to do with the cost basis part. I have records of what I paid for the collections I buy since I use Facebook for the orders I have shipped and the same for eBay collections I buy. But how in the world do I write my cost basis if I sell 20-30 cards individually form the listing or bulk stuff together from multiple collections. Should I say every card costs the price I paid for the collection or just say 0 and eat the full cost, since I can’t prove 100% which card came out of each collection. Guess I should talk with the live tax agents on turbo tax when I finish getting my together. I should have went with being a cat this year instead of selling cardboard I heard cats don’t pay taxes.
@@TriWaZe dang it!!! knew I should have just been a cat !
You can either claim the purchase as a one time expense for the year (the easy way) or you can break down the cost to a per card basis, and claim that expense when the card sells - be it this year, or 5 years from now. But you have to be able to track that individual card. This is why sometimes you get a card in a sleeve with a upc or serial number on it. It is a lot of datakeeping and spreadsheeting. You have to document every card, every purchase, every sale.
This is not to be taken as tax advice. See an accountant.
@@Daeyel thank you for the “not financial advice” advice. Will talk with a tax agent when I go to file and bring this up with them.
Waiting for 3.0
Thank You Rudy!!!!
Sticking up for the little guy
Im screwed, private cash sales, I will have to become a trader rather than a seller. Meaning I can't buy as much new product.
Preach it
We need an organization lobbying on small side hustle businesses.
What I've also heard is that billionaires, honestly, just don't really make mistakes. They pay accountants and lawyers on retainer to ensure every penny they earn, spend, and invest is done so to the letter of the law. Whereas a mom & pop small business will probably mess up a few grand a year just cause they're trying to run a barber or a card store - they aren't super litigious with their paperwork.
Timmy's Emporium's accountant looks like Johnny Depp on the cover of Fear and Loathing in Las Vegas
It’s just stupid for them being able to tax the same item multiple times
Moonshiners feel the same way
It isn't a tax on the item though. That would be a sales tax. The tax is on any profit you make from selling something. The profit is being taxed, not the item.
@@christianbackous2608 still 2 taxes
Your employer pays taxes to pay you, then you pay taxes to receive it, then pay taxes to spend it, then whoever you bought stuff from pays taxes for selling it. Taxes up the ass
@@pinoarias8601 still two taxes?? If you sell something, for a profit, then you have income and income gets taxed. It has always been this way. Only difference now is it's harder for people to hide it if they use third party payment processors.
Best video you have had in a minute, ty for saying something for the little guy.
Had no idea I could be ambushed; seriously thank you for the caution
When I heard him say people step families doing laundry for them I spit involuntarily from the laugh that ensued
Rudy I'm gonna need those TPS Reports Filled in Triplicate and Filled with the IRS.
I guess this means stores will now offer even less on the dollar for your cards/collections because your selling profit (less tax) has just dropped 30%.
One positive thing about this is you don't pay federal taxes on long term capital gains under 41k in a year which most collectible items you sell on ebay would add up to less than that total. Just make sure you had the collectible for at least a year before selling it for the long term capital gains tax rate. A 700 dollar card you bought 3 years ago would be taxed at $0 for me in WA state at least.
I am by no means an expert, but I'm pretty sure this is a Federal policy. It doesn't matter what state you are in. Additionally, this income is being reported on a 1099-K not the 1099-DIV or the 1099-B, meaning it is being treated as normal income/sole proprietor/pass through income, that is taxed at your normal tax rate of whatever tax brackets you are subject to. Unfortunately, while our community likes to think of these as an asset class that should be considered a normal investment, the IRS has pretty strict requirements about what can and cannot be reported as what type of income.
@@latentpotential4520 You are correct.
it might be because, smaller quantities, when added up, amount to a lot. That makes more sense to me personally than this whole the government is out to get each and every smaller vendor.
Nobody making under 45K a year should be taxed. Everyone above that however should be taxed.
I was an independent contractor for a bunch of theatre companies at one point in my life. I once had like, 19 or 20 1099’s I had to input. It was a major pain in the ass, but I still had to do it
Rudy: The government needs money.
Rest of Us: How about stop giving companies giant tax breaks and force them to pay the taxes they owe.
Rudy, you're the shit!!!
I love your videos and content.
Patron for life.
I remember exactly how much my cards cost me especially my power. That way I can rub it in everyone’s face because I I never threw away my toys from childhood. 😂😘
It's a scam on the working class. I've moved to selling a lot more on marketplace. No fees and no taxes
Unfortunately not as large as a market but yes I try to sell as much locally as possible
For now.
It does ask you and the people if the item sold. They can see the numbers if they actually wanted to. Unless you just have $1 on everything and have them text your number. I doubt they would go to that extreme though.
You're still required to report your sales to the IRS once you hit $600...
Until the IRS computers notice your expenditures exceed your income.
Then you might get some uncomfortable questions on how you managed to make $40K, but spent $60K, yet you don't have 20K in debt...
Have fun.
The oligarchs make the laws basically, no reason to tax themselves. A quick bribe, erhmmm, "campaign donation" and the ROI is ridiculous.
Low hanging fruit. Universal concept.
If we forced to govt to just produce a balanced budget and closed tax loopholes all this going after poor people wouldn't have to exist.
that's not true unfortunately. But we should still dial down government spending and simplify the tax code
The Bobs at the IRS must be bored and looking for something to do...They gotta get that popsicle money for their new basement remodel.
Popsicle
I don’t think that taxes for collections must be. Only if it is “piece of art”, and if you do this like Pro, you pay taxes as LLC at list
The reason why the government targets the little guy is because those people don't fight back, they just pay fines. So rather than sinking cost into getting big fish they spend nothing on form letters and trash the underclass. IRS in a nut shell.
the rich have time to fight back. they dont have to work. if they've got businesses and can close down without being affected of course they will fight for their money because they dont have to punch a clock. the little guy might not have the time to check the government on the one or two days that he's off from work.
doesn't have to be your opinion. i believe they admitted, recently, that they don't go after people with money because those people can afford lawyers.
The government needs money because they spend way more than we ever gave them. Of course they come after the little guy, it was never about helping the little guy.
please delete this comment. so bad. so so bad
First off Rudy for President!! I'm an Australian and I would still vote for you..
At the end when you were saying it feels "off" and "dirty" in Australia we have a saying. "Does it pass the pub test?" This saying is even applied to politics.
anyways love the vids and keep it up young man
Thank you for this video, please do more like it.
One of the best videos in a while and spot on. If selling, try to move to marketplace and deal with cash to avoid getting hosed. Obviously though, not nearly as great amount of exposure to what you're selling.
I wish Canadian truckers cared about getting rid of this new tax plan.
This is the comment I came for.
i wish you weren't such a snowflake
Feel like my whole life has been me wondering when Ill be successful and actually be happy
You're happy when you're satisfied, but most people are never satisfied.
In this day and age? Never
Feel your pain
Glass half full view - less reason to be a Timmy. Long term capital gains can be as low as 0% if holding over a year
This is why I stopped selling on ebay when they said they wouldn't allow sellers to accept money through paypal. They wanted your direct deposit banking information. Immediately I knew taxes were coming, and there was going to be no choice but to pay.
For what it is worth, that change had nothing to do with taxes. Ebay wanted to make the transaction fees PayPal was making on your sales.
Oh shit, one of the weird times I agree with alpha. I don't even sell mtg.
And I thought I was dirty.
i need more videos of Rudy explaining how to do my taxes
Excellent video Rudy. Appreciate your perspective.
Well obviously poor people are easier to target. They don't have money to fight back, lobby, etc. One could say it cost several hundred dollars to keep the card in good condition, thus negating the profit I'd think.
Everyone needs to start up a business. It's too late to help for 2021 taxes but do that this year for 2022 taxes
Also, if people need help with taxes.... they will have to pay additional money to have their taxes done for them. Shame.
@@ryangreenwald3755 welcome to capitalism. The greatest scam ever
@@ProudCommie lol. Well capitalism, inherently, isn't evil or bad. The reason even small income families can own a home and get material things such as a TV for $100 or a toaster for $5, things that were considered luxury back in the day, is due to capitalism. Striving to make more, build more, own more can be considered evil or toxic BUT is also not inherent bad or wrong. That feeling of wanting more for one's self is the same feeling that takes a single individual living on a couch sharing rent with five people to a millionaire living the high life. That idea, might I add, can't be done in some countries. It can still be done freely in America. The old saying "we get what we put in" still holds water here. Just finding the balance of life and work is the real question. How much life are you willing to sacrifice to reach your goals to financial success. As a reminder, not all of us will get a equal amount in life. That's not realistic. That's fantasy. Back on topic, Capitalism gets corrupt by greed. Sadly, for many who do become successful greed very well takes hold. That's the issue from my perspective.
If you're selling anything online, the IRS already views you as a Sole Proprietorship.
@@TriWaZe I'll 100% agree our government is corrupt with greed and term limits should have been day one.
Tax the guy with no advocates. Easy game, easy life.
100% the middle class and working class don't.
Thanks Rudy! -the little guys
Thank you for talking about this.
6:02 It's too late now Rudy, they're gonna have to catch me. I think I can out run the IRS tho🤣🤣🤣🤣🤣🤣🤣
Taxes and accounting in general can be a bit tricky. For instance what is the cost basis for a card you pulled out of a pack? Especially if you paid good money for an older booster box or pack. For starters a pack has X number of cards and it's possible to make a profit (or loss) by opening it, ie. you might pay $100. for the pack but then score a mythic rare that is worth $700. If that's the only pack that you opened that year, do you have to pay taxes on the $600. gain the same way gambling earnings can be taxed? And when computing basis, how do you split that $100. into basis for each card (since the pack has multiple packs?) The accounting honestly sounds like a can of worms! The same is true about cards that were part of trade deals and such. If you did a trade deal with some guy, and you traded cards with a market value of $400. for cards with a market value of $600., do you have to pay taxes on the $200. gain as barter income or such?
Got shook down for over $200 bucks they said they overpaid my student grant for school.
Fun fact. If you decide to fight them and lose your bill continues to accrue interest.
What if I set part of my room on fire where I store all my 1099k forms? Oh and that room did not come with a sprinkler.
Fricked Polluted Delta Expedition had a cost basis of 12 bucks.......
So The Accountant is actually a biography of Rudy's life before his cardboard empire
You really bring it to the table Rudy ! Thanks for your shared knowledge
The government is looking for free tendies and it appears that they’ve found some.
When it's cheaper to hire a lawyer then to pay uncle Sam....
Something's wrong here.....
My time is expensive... if I sell something that is $700 my cost basis is $700. =)
And this is why i feel so lucky to be in Australia. Noone here pays any tax at all on any income under $19,000 per year. Tax brackets kick in after that. It's absurd that the US taxes poor people and still doesn't provide universal healthcare or interest-free student loans. Still a second-world cesspool.
Yeah the government needs money because they're spending it faster than me going to the bathroom after having Taco John's. The rich get richer the poor get poorer.
You know what this means, it's time to slay the beast that came from jekyle Island.
It’s corrupt. That’s all it is. If I decide to sell my sneaker collection that I already paid taxes on, why do you get a cut off the top of me just trying to recoup my money from stuff I just don’t want anymore? That’s double dipping and it’s unfair.
It’s a small club and we aint in it
We are all initiated though.
Through movies, books, games, plays, music, the Opera. Etc.
Make all the clubs they want though. This is our world.
Timmy isn't just a cat in the basement Flippin floppy tacos drooling on shiny cardboard.. he's speaking truth.
Remember little Timmy, just because something IS, does not mean that's how it Should be.
Definitely selling nothing on eBay this year No more buy listing cash or nothing I don't need the money that back F Given the IRS another taco
How much does little Timmy make from a lemonade stand on the corner?🥲
In the middle of a Rudy video...I get a diaper commercial..coincidence?
Why have you not formed a S-Corp? You’ll save money on your Self Employment Tax… S Corps force you to pay a “reasonable salary” which is the only income that is subject to the 15.3%. All leftover profits are only subject to federal income tax.
How about using a Streamlined Sales Tax Agreement Certificate of Exemption and / or an E-595E Streamlined Sales and Use Tax Agreement Certificate of Exemption?
Thanks for the explanations they were very helpful
I knew going in to selling some of my collection, that I was just moving money around. I need profits to pay rent, and I'll give back that 'loan' next year to the govt. At this point, making money(net profits) is just a temporary loan from the government.
You know how FB marketplace always asks if you sold something you listed? Yeah...
I absolutely love that you support us plebs!
Was a good video.. I resemble your pleb remark lol
Please do more poor people videos!