Guys/Gals,

A revised tax regulation will be going into effect next year so I thought that it may be best to let everyone know what the deal is so they can prepare. In essense, the bill; requires companies to report to the IRS payments of more than $600 a year to any vendor.

Now, how does that apply to the us? In discussions with other members, the issue is, are we a company or small business? Most of us will say that we are NOT because we only dabble in the hobby - we buy items and occasionally sell them to support our habits. So since we are NOT a company or small business, we would not have to file. Well, is that really accurate? Suppose we sell items on eBay and during the year, and we pay more than $600.00 in fees - does that make us a company or small business? How about PayPal fees? If our PayPal fees exceed $600.00 does that make us a company or small business?

Hey, I can't say for sure but in the eyes of the IRS, that may very well decide you are at least a small business. Now if the IRS feels we are a small business, they will start digging - suppose we bought a football, helmet or jersey for $600.00 or more, did you file a 1099 form? No forms? you may have a problem. Remember they want their money and YOU have to prove your case - NOT the IRS.

Hey, I am NOT an accountant so it would be best if each member go to their account and get advise on their own situation. A wise man told me years ago "pay your taxes" and he was right. I sleep better and if anyone is audited by the IRS and discrepancies are found, with penalties and fees, paying your taxes upfront is the cheapest way to go.

Here's a link to the bill


http://www.businessweek.com/smallbiz...526_855178.htm

Jim

flaa1a@comcast.net