λngelღмander Posted August 4, 2015 Share Posted August 4, 2015 So I'm approaching 200 market sales now, which is a big deal because once I reach 200, I'll have to provide my social security number and other related info in order to continue selling on the market. The market is my main place for selling items, so that matters a lot. Since I mainly sell items for 200 or more dollars, I'm a little worried about how the 20,000 dollar profit thing works. Every cent of the money I make from selling an item on the market is reinvested into buying more items. That's fine with me, but I don't know how the IRS would feel about it. Let's say I sell 20,000 dollars worth of items in one year. That's DEFINITELY feasible, because I'm constantly selling items worth 200, 300 dollars on the market. I'd estimate I'm probably over 10,000 dollars already, and I know I'm fast approaching that 200 sale mark. Will the IRS consider every cent of sales on the market as profit, or will they understand that I'm reinvesting the money, and that my gross profits are a fraction of the gross market sales? I probably only make 2000 dollars on 20,000 in market sales, and the base tax of 15 percent on that 20k means that the government will ask me for at least 3000 dollars? That would put me in the negative. Will the IRS actually understand that the sales aren't all profit, or do I need to start using alts and avoid reaching 200 sales, so I don't end up going negative? Link to comment Share on other sites More sharing options...
Python. Posted August 4, 2015 Share Posted August 4, 2015 Being an adult is hard. Link to comment Share on other sites More sharing options...
Uncle Dong Posted August 4, 2015 Share Posted August 4, 2015 You could pretend to be Canadian but then if you get caught your account would be taken down for tax evasion But you could always move to canada Link to comment Share on other sites More sharing options...
λngelღмander Posted August 4, 2015 Author Share Posted August 4, 2015 I want to know if the IRS will tax me on the gross PROFIT I make, if I can prove to them my method of trading, or if they will tax the gross SALES, which will be an amount much larger than my actual profit. I'll just have to quit trading if the latter is the case, or find a new way to offload items. Link to comment Share on other sites More sharing options...
Uncle Dong Posted August 4, 2015 Share Posted August 4, 2015 I want to know if the IRS will tax me on the gross PROFIT I make, if I can prove to them my method of trading, or if they will tax the gross SALES, which will be an amount much larger than my actual profit. I'll just have to quit trading if the latter is the case, or find a new way to offload items. I dont know about the whole IRS thing but you could stop using the market at 199 and then move your items to an alt and continue to use the market Link to comment Share on other sites More sharing options...
fmca Posted August 4, 2015 Share Posted August 4, 2015 I didn't realise you had made 10,000 USD on the market. GG. Link to comment Share on other sites More sharing options...
λngelღмander Posted August 4, 2015 Author Share Posted August 4, 2015 I didn't realise you had made 10,000 USD on the market. GG. I didn't make 10,000 USD on the market, I've made like 800 USD or so, because I make a little under 10 percent on each sale. Lets say I buy X X is worth 300 usd. So I sell it for 300, I buy keys with the proceeds, I get Y keys. X cost me Y(.93) keys or so, so I made a small margin of profit. But steam counts that as 300 dollars profit, not less than 30 dollars profit. So theoretically, I could end up paying more taxes on my "income" than actually came in. Link to comment Share on other sites More sharing options...
Hexlicious Posted August 4, 2015 Share Posted August 4, 2015 Most likely not, I don't have taxes yet so not of much help. Link to comment Share on other sites More sharing options...
Zapperzz Posted August 4, 2015 Share Posted August 4, 2015 I personally think that using the market to profit is far from the best way to profit, I would stop using the SCM immediatly so you can use it for things beside unusual trading. If I was you I would just switch to regular unusual trading, much easier and you don't have to wait a week for stuff to become tradable xD Link to comment Share on other sites More sharing options...
♠Derpeh♤ Posted August 4, 2015 Share Posted August 4, 2015 Im not too familiar with the whole steam tax because I dont live in the US (i.e. dont have the market limit) but deom my understanding they are required to provide the gross sales of your account? Arnt you supposed to use the gross sales...etc to calculate net gain and that would go under some additional income? Link to comment Share on other sites More sharing options...
Budi Posted August 4, 2015 Share Posted August 4, 2015 As one of the few adults around here, I can help explain what you should do regarding any taxing. The situation you (and the rest of us) are in when it comes to what you should report if you are 1099'd is very similar to what you'd do if you trade stocks (I do). When you buy a number of shares of a stock for say $1000, the trading platform you use (Etrade, Ameritrade, etc) sometimes will, but usually won't report that purchase. What they will report to the IRS is your sale, when it happened, how many shares, and what amount of money you received. So lets say you sold that stock for $1200 dollars, or a $200 dollar profit. The trading platform will report the $1200 proceeds, but won't show your $1000 purchase. Usually what I do (and many others) is itemize my trades of stocks. When you put them on your tax form, you should report to the IRS when you bought the shares, how many, and for how much. This way they have a record to show you only made $200 on the stock, not $1200. So basically, it is up to you to start documenting your profit if those transactions are reported to the IRS. My recommendation would be to make a spreadsheet in Excel, with the purchase/sell dates, how many shares, for how much total cost, and the net profit. You can even attach that as a form on your taxes, which helps your auditor a lot. Basically, don't worry too much about your gross proceeds, but make sure you have documentation to back up the purchases. Screenshots aren't needed, but maybe keep those for your personal records. Also, if you are only reporting 800 dollars in additional income, I wouldn't worry too much about being taxed on it. You will, but when you claim 1 on your taxes, you'll take the standard deduction and that will offset any gain you had on that income. You'll probably still end up getting a refund on whatever small amount of money you make anyways. So really in the end, it does matter much, except the government is a pain in the ass to want to keep track of what you're doing to make sure you aren't skirting your taxes. Link to comment Share on other sites More sharing options...
λngelღмander Posted August 4, 2015 Author Share Posted August 4, 2015 As one of the few adults around here, I can help explain what you should do regarding any taxing. The situation you (and the rest of us) are in when it comes to what you should report if you are 1099'd is very similar to what you'd do if you trade stocks (I do). When you buy a number of shares of a stock for say $1000, the trading platform you use (Etrade, Ameritrade, etc) sometimes will, but usually won't report that purchase. What they will report to the IRS is your sale, when it happened, how many shares, and what amount of money you received. So lets say you sold that stock for $1200 dollars, or a $200 dollar profit. The trading platform will report the $1200 proceeds, but won't show your $1000 purchase. Usually what I do (and many others) is itemize my trades of stocks. When you put them on your tax form, you should report to the IRS when you bought the shares, how many, and for how much. This way they have a record to show you only made $200 on the stock, not $1200. So basically, it is up to you to start documenting your profit if those transactions are reported to the IRS. My recommendation would be to make a spreadsheet in Excel, with the purchase/sell dates, how many shares, for how much total cost, and the net profit. You can even attach that as a form on your taxes, which helps your auditor a lot. Basically, don't worry too much about your gross proceeds, but make sure you have documentation to back up the purchases. Screenshots aren't needed, but maybe keep those for your personal records. Alright thanks, I'll keep that in mind for next year. I've had far too many purchases to really go back through now, so I'll just trade on alts until next year, and then I'll begin documenting my profit. Link to comment Share on other sites More sharing options...
!каблам Posted August 4, 2015 Share Posted August 4, 2015 I feel bad for america ;( Couldn't you just fake your info that you're european? Link to comment Share on other sites More sharing options...
λngelღмander Posted August 4, 2015 Author Share Posted August 4, 2015 I feel bad for america ;( Couldn't you just fake your info that you're european? Well I'll be 18 in two days, and tax evasion is a long, long sentence. Link to comment Share on other sites More sharing options...
Tobiased Posted August 4, 2015 Share Posted August 4, 2015 I've reached that limit already, but luckily i'm in Canada so that worked out. It may be a good idea to just use the market when you need it, only making those purchases to nab those random good deals Link to comment Share on other sites More sharing options...
Orengi オレンジ Posted August 4, 2015 Share Posted August 4, 2015 I feel bad for america ;( Couldn't you just fake your info that you're european? im from Slovenia, which is in Europe, yet i have the retarded 200 listings per calendar year aswell, lmao. idk why the fuck its here / how to make it go away Link to comment Share on other sites More sharing options...
Dreadscope Posted August 4, 2015 Share Posted August 4, 2015 -make an alt account -sell stuff on said alt account and liquidate all the funds into keys -trade keys back to main account -problem solved Link to comment Share on other sites More sharing options...
1+1=3 ? Posted August 4, 2015 Share Posted August 4, 2015 I feel bad for america ;( Couldn't you just fake your info that you're european? Well I'll be 18 in two days, and tax evasion is a long, long sentence. Wow. I really doubt whether IRS can check your assets on virtual items or not. If you don't type your personal info at the start of the application of your account, I don't really think they can check your assets or identity. I am afraid you are just scaring yourself. If Steam asks for your personal info, just make an alt like a scammer. Problem solved and good bye IRS. Btw, I live in Hong Kong. Low tax rate and no stupid Steam tax. GG. I feel so bad for American. Link to comment Share on other sites More sharing options...
BankingBot Posted August 4, 2015 Share Posted August 4, 2015 Wow. I really doubt whether IRS can check your assets on virtual items or not. If you don't type your personal info at the start of the application of your account, I don't really think they can check your assets or identity. I am afraid you are just scaring yourself. If Steam asks for your personal info, just make an alt like a scammer. Problem solved and good bye IRS. Btw, I live in Hong Kong. Low tax rate and no stupid Steam tax. GG. I feel so bad for American. steam tax is universal, it's the country's tax that's bothersome. Living in singapore, no tax here either, guess since steam has its headquarters in US and UK, gonna have tax there for using the market rofl. Link to comment Share on other sites More sharing options...
Budi Posted August 4, 2015 Share Posted August 4, 2015 Wow. I really doubt whether IRS can check your assets on virtual items or not. If you don't type your personal info at the start of the application of your account, I don't really think they can check your assets or identity. I am afraid you are just scaring yourself. If Steam asks for your personal info, just make an alt like a scammer. Problem solved and good bye IRS. Btw, I live in Hong Kong. Low tax rate and no stupid Steam tax. GG. I feel so bad for American. The IRS doesn't have to "check" on virtual" assets all the time, if Steam reports a 1099 for your earnings, then they automatically know about it. If you don't report those earnings, then you'll most likely be audited and if you fail to report those earnings, you'll either pay fines and back taxes (which is why you hear about some people having back-tax bills of hundreds of thousands of dollars), or you'll go to jail for tax evasion. So no, your argument is invalid, the IRS doesn't simply "go away". Link to comment Share on other sites More sharing options...
Administrators Teeny Tiny Cat Posted August 4, 2015 Administrators Share Posted August 4, 2015 steam tax is universal, it's the country's tax that's bothersome. Living in singapore, no tax here either, guess since steam has its headquarters in US and UK, gonna have tax there for using the market rofl. Not in the UK. I'm past the limit, no issues, just had to show I'm not American. Link to comment Share on other sites More sharing options...
.Dusk Posted August 4, 2015 Share Posted August 4, 2015 is this limit only in the US? Link to comment Share on other sites More sharing options...
1+1=3 ? Posted August 5, 2015 Share Posted August 5, 2015 The IRS doesn't have to "check" on virtual" assets all the time, if Steam reports a 1099 for your earnings, then they automatically know about it. If you don't report those earnings, then you'll most likely be audited and if you fail to report those earnings, you'll either pay fines and back taxes (which is why you hear about some people having back-tax bills of hundreds of thousands of dollars), or you'll go to jail for tax evasion. So no, your argument is invalid, the IRS doesn't simply "go away". -Make an alt -Steam won't report -IRS goes away -solve the problem I don't really think IRS will send you to jail just because you make $800 on steam and don't pay the tax. If so, most of the people in America will go to jail and jail will be full of people. Link to comment Share on other sites More sharing options...
oli.t678 Posted August 5, 2015 Share Posted August 5, 2015 Whats the law about things like this? Also, do I need to worry about any of this since I live in Canada? Link to comment Share on other sites More sharing options...
Budi Posted August 5, 2015 Share Posted August 5, 2015 -Make an alt -Steam won't report -IRS goes away -solve the problem I don't really think IRS will send you to jail just because you make $800 on steam and don't pay the tax. If so, most of the people in America will go to jail and jail will be full of people. Yes you can make an alt. The point I'm making is if you do put down your actual social security number/name/address on file when you cross 200 trades and if steam then does report your earnings, you had better believe the IRS is going to look into that when you don't report the income. Don't for a second fall for the thought that "its only 800 dollars" is a valid excuse that they aren't going to look into your records. Regular people, young/old/poor/rich get audited all the time, so no one is immune to that. Link to comment Share on other sites More sharing options...
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