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was wondering about taxes?

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    mike1 started this thread.
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    was wondering about taxes?

    obviously im getting cash from scrapping. i heard from a guy that you have to pay taxes for scrapping is that true? i had no idea i thought since it was cash and not checks that it was tax free? by my logic if they tax you for this cash then you would also get taxed for other cash jobs like lawn mowing and doing yard work for people who pay in cash. thoughts?



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    mikeinreco's Avatar
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    This is what they call the "grey area"....not sure if we have any accountants here but I would check with one to get correct answer

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    Quote Originally Posted by mike1 View Post
    obviously im getting cash from scrapping. i heard from a guy that you have to pay taxes for scrapping is that true? i had no idea i thought since it was cash and not checks that it was tax free? by my logic if they tax you for this cash then you would also get taxed for other cash jobs like lawn mowing and doing yard work for people who pay in cash. thoughts?
    Both examples are taxable income.

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    Quote Originally Posted by mike1 View Post
    obviously im getting cash from scrapping. i heard from a guy that you have to pay taxes for scrapping is that true? i had no idea i thought since it was cash and not checks that it was tax free? by my logic if they tax you for this cash then you would also get taxed for other cash jobs like lawn mowing and doing yard work for people who pay in cash. thoughts?
    Read the thread in the link below - I would suggest reading the entire thread it's a "sticky" thread- some of the links in it are old but the information is still applicable: https://www.scrapmetalforum.com/lega...ing-taxes.html
    Last edited by SKWrapper; 01-15-2019 at 04:01 PM. Reason: clarification
    Turn & Burn

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    From what I understand if you bought a lawnmower new then used it 5 years and scrapped it you do not have to pay taxes on "said" lawnmower but like I said I'm not an accountant

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    Virtually all personal income is taxable. If scrapping is just side money for you then you probably wouldn't legally have to report it as with yard sale or ebay money below certain (googleable) thresholds

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    Quote Originally Posted by JJinLV View Post
    Virtually all personal income is taxable. If scrapping is just side money for you then you probably wouldn't legally have to report it as with yard sale or ebay money below certain (googleable) thresholds
    If it is just side money, it may be considered hobby income and not business income. Either way, still taxable and should be reported.

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    Quote Originally Posted by mike1 View Post
    obviously im getting cash from scrapping. i heard from a guy that you have to pay taxes for scrapping is that true?
    YES

    Quote Originally Posted by mike1 View Post
    i had no idea i thought since it was cash and not checks that it was tax free?
    You thought wrong. ALL Income is taxable.
    That said >> When you do your SCHED C >> You can deduct all money spent to make money.
    Cost of your dolly, any advertising and so on

    Quote Originally Posted by mike1 View Post
    by my logic if they tax you for this cash then you would also get taxed for other cash jobs like lawn mowing and doing yard work for people who pay in cash. thoughts?
    CORRECT
    You are taxed for ALL income above a certain limit
    That limit is based on your circumstances

    https://pocketsense.com/file-income-...099-23861.html

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    Quote Originally Posted by mthomasdev View Post
    If it is just side money, it may be considered hobby income and not business income. Either way, still taxable and should be reported.
    I don't remember the exact threshhold but if it's below like $100 or something for the year it doesn't have to be reported. Went through the tax documents for it many years ago briefly after running a bunch of yard sales after a family member passed.

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    In town, there's a once-annual indoor garage sale thing. People rent a booth, and put up tables and sell pretty much whatever. Every year, the state has someone from the Sales Tax Department who issues a temporary license to everyone. It probably depends on where you live, but out here they even hit the yard sales
    More than Scrap Value Shipment Tips: http://www.scrapmetalforum.com/scrap...tml#post242349

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    Now I don't know id this applies here, but I have read from some tax companies that because you don't actually have to file taxes until you make above a certain threshold per year, you don't do a tax return or pay taxes. For me, that threshold is $7000 per year. Because I only make about $5000-6000 per year, I don't bother with anything tax related. Plus, my dad still files me as a dependent of him so I don't file taxes anyway no matter how much I make.
    Don't tax me on my two cents here, pun intended.

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    If there is no profit, there is no tax consequence. All the scrap I exchange is an exchange of equal value. There has been no income.

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    The government cares about $$. If it's income, you have to pay taxes on it. If it's a loss or no-profit business, you still have to report it even if you don't owe anything. Don't take a risk.

    Why do you think it's such a big deal for people selling illegal drugs? You think the feds actually care? They don't. It's an issue because they can't tax it. It's all about the $$.

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    Quote Originally Posted by t00nces2 View Post
    If there is no profit, there is no tax consequence. All the scrap I exchange is an exchange of equal value. There has been no income.
    Makes no sense
    where did the scrap come from?
    even if it was given to you >> Then any and all money received is income
    If you had to pay for it >> Still income >> BUT you can deduct costs >> advertising, truck, gas + insurance + state fees (registration) to operate the truck
    all covered on SCH C

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    Good to know that vehicle registration is deductible.

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    I thought all income is taxable. But on the same thought all expenses (like gas/mileage, truck maintenance and repair, tools for the job, bookkeeping expenses, etc... are deductible) So unless you get a lot of money scrapping and never buy machinery, computers and other big ticket items, you will probably not make a profit, which is what I thought is the taxable part. Not the gross income from scrapping, but the after deduction income.

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    Its the same as lottery tickets. Any single transaction over $600 is taxable and the lottery winners have to go out and "Claim" there prize at the lotto headquarters

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    Quote Originally Posted by greytruck View Post
    Its the same as lottery tickets. Any single transaction over $600 is taxable and the lottery winners have to go out and "Claim" there prize at the lotto headquarters
    Under $600.00 is also taxable , just there is no W2G issued
    You must report all gambling winnings on your Form 1040 as "Other Income" (line 21), including winnings that aren't reported on a Form W-2G

    You may deduct gambling losses only if you itemize your deductions on Form 1040, Schedule A, and kept a record of your winnings and losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Claim your gambling losses up to the amount of winnings, as "Other Miscellaneous Deductions" (line 28) that is not subject to the 2% limit.

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    Quote Originally Posted by JohnC4X4 View Post
    Under $600.00 is also taxable , just there is no W2G issued
    You must report all gambling winnings on your Form 1040 as "Other Income" (line 21), including winnings that aren't reported on a Form W-2G

    You may deduct gambling losses only if you itemize your deductions on Form 1040, Schedule A, and kept a record of your winnings and losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Claim your gambling losses up to the amount of winnings, as "Other Miscellaneous Deductions" (line 28) that is not subject to the 2% limit.
    John is completely right here. The part that sucks with gambling losses is they really don't count until your schedule A total goes over the standard deduction. Lot harder to do with the new tax code.


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