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HAven't seen any threads like this. May have looked in wronge plac though?
Anyway, how do y'all do the report taxes for scrapping? Mainly those that do it part-time and on a small scall. I know if it is your full time job then you have to report your income but if you do it part time or on the week-ends then do you do it?
Anything over $400 a year I think it is needs to be reported as income.
SCHL C
Keep records of your expenses
Real Basic
Any payouts you get (incoming money) minus expenses needed to get this money = Taxable income
According to the federal government you are supposed to report all of your income. Different states have different rules in terms of how much you can make without reporting. In Michigan is 600.00 per year. Note that this means anything over that amount has to be reported, NOT if you made more than that in addition to your regular job.
Keep all of your payout receipts from your buyers/scrap yard, and receipts for any expenses. If you do not have a large amount of income from scrapping the IRS will probably not notice, but if you are making thousands and not reporting it you might wind up in some trouble.
Sorry for the diversion, but I don't think most scrappers paid taxes. The guys in the overstuffed pickups picking the alleys clean don't. Why pay taxes when you get paid in cash?
A schedule "C" or Sole Proprietorship filing covers almost everything an independent business guy wants to do. Of course you MAY need specific licensing and will of course be required to adhere to all applicable laws in your trade/ business. The only trick is to keep every receipt, every invoice, and be prepared to pay cash for labor, hoping they do not hurt themselves on the job. Going all out with workmans comp insurance will break the bank. If you work by yourself most of the time and only need help once in a while, find a guy you trust who understands that cash means cash. It might be possible to have your man write you a receipt for "tools" so you can deduct his labor cost. Liability insurance is a must have if you are performing actual work on customers property. These are just ideas, not saying anyone ever does this.
Bad ideas are best left unsaid.
well here is a rfeasion why. my partner just got notice of an audit. fortunately he is not afraid of the robbers and has been through it before. He is a maticulis record keeper.
my accountant handles it