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They won't send me a 1099, I doubt it. The amount is probably somewhere between $500 and 1k, not alot. I had no idea or ever thought to file it on my income. Wish I never saw this post, never would of crossed my mind for something so little. You really think somehow the IRS is going to be able to track down a couple hundred dollars worth of scrap?Quote:
Originally Posted by KZBell
Same her. Every year, I ask my different yards if they will be sending out 1099's or not. This year is still a "no." I continue asking every year, 'cause you just never know when laws may change, even on a state or local level & I haul to 4 different yards in 3 states, so better to play it safe. Besides, one of these years, if they ever have to send them out, it will save me the trouble of adding up the receipts.Quote:
Originally Posted by submarinepainter
If they file a 1099 then in most cases the IRS will catch up with you and want your tax liability for the amount. If no 1099 is filed then the next risk would be if the yard got audited by the IRS at which time all money paid out would be reported and if the yard keeps track of you via drivers license then that could be a bad thing. It's all a roll of the dice and there are certainly bigger fish to fry but sometimes the small ones get caught in the net too.
There was wording in legislation in early 2010 that would require companies to submit 1099 forms to anyone whom they purchase over $600 worth of goods or services from in a given tax year starting in 2012. There have been some revisions to this legislation since, but here is a link to an article about it.
Don't ever assume that your income will not be reported. Government agencies are losing funding sources (ie: Taxes) and are looking for any way to recoup them. Do yourself a favor and get the advice of an accountant and not from a forum. Although the members of this forum are great at sharing advice we are not experts on tax law and you can be getting unreliable information.
Yes they do report it to the IRS. Will you be named specifically? Possibly. If they get audited themselves. Makes sense to report the income, take the deductions and PLAY IT SAFE. Or you could roll the dice and wait to see if it BLOWS UP ON YOU.
Much in the same way you could drive your truck knowing it is low on oil while you have a couple of quarts riding in the bed of the truck. It may make it where ever you are trying to get. For a while anyway. But eventually it will BLOW UP ON YOU. Now that would be VERY COSTLY. Especially when all you had to do was PLAY IT SAFE.
They do report there income and loses to the IRS.But they do not send in each persons name.So i dont think you have anything to worry about.
Nah dont report it the IRS doesnt care about it at all...why would they..sell away!!!!
I pay taxes on services that my business provides. Most of my customers paid taxes on the material when purchased. The initial seller is solely responsible for taxes, that's my interpretation of fed law, but I leave it in the hands of my bookkeeper. Some may go as far to get a resale license? I do know gov. is looking to better regulate this industry.
I asked my scrapyard if they 1099 me after my first big job. They laughed and said, "you're probably the only guy that knows what a 1099 is around here." This is NY though, and a pretty big metal recycling company...Alot people ride some pretty high horses around here I've noticed...take everything you read with a grain of salt, it is the internet, ask some of the other scrappers at the yard, they'll probably laugh to. If you own a registered business, that's a different story, but the average "street-level" scrapper I dont think needs to worry.
I worked as an accounting assistant for over 10 years, and you should pay taxes on all income received, and keep records of all expenses, for your own benefit.
I have read on the this forum that some scrap metal yards issue 1099 forms. Do you need a license to sell over 10 cars to a scrap metal yard in Maryland?
Thanks
While I agree and report all income, if only to stay out of trouble, your yard has to have your SS number to issue a 1099. No SS number, no 1099.
I think they ask I'd based on their cities requirements. I go to two yards in two different towns. Yard A requires id each time . The first time I went their they said the city had just started making them do that. I'm assuming for theft tracking purposes. Yard B does not require id, unless, you sell more than 100$ worth. I will file my reportable as "hobby income" I've studied the write offs associated and found the write offs may be mire beneficial than not filing at all.
Talk to your yard basically up to them on the 1099 issue and in kansas its not income, just selling something. Talked to the lady at the kansas unemployment office, when was on it couple years back, and she said it was not considered income by the state of kansas. Again varies by state, as per the federal obama tax deal, talked to my tax guy and he informed me it was a urban legend. Don't see why they would need any more taxes, pay tax on all my supplies and fuel, not to mention, they taxed most of what I torch for at least 20 years before it was considered "junk"
Thanks, Tater!
I would hate to see what would happen to the prices if the yards had to start reporting every transaction the IRS and sending out 1099's to every scraper that came into the yard. The prices would be cut in half just to pay the extra overhead it would take to do this.
Four more years and it's anyone's guess as to what could happen.
I read somewhere that 1099 plan on income over 600 got shot down.
If I scrap something that I have purchased then I don't see how they could tax you for it again because I have already paid taxes on it once. If you are scrapping as a business then I could see them wanting their tax money.
I have been deleting posts suggesting that you report income as "recovered loss". Recovered loss refers to insurance claims. As such, this advice is considered "advocating illegal or unethical activity" and is deleted. Please do not post it again until you PM a moderator or admin showing how this conforms to IRS rules/laws.
if you make a capital gain on a purchase, you have to report that gain. technically you should have paid sales tax on the item, yes.. but say you bought it for $10 (including sales tax) and sold it for $100... you now have $90 of taxable income to declare. thats why you need to log your expenses as deductions from income as well. gas/truck repairs/ purchase cost, etc.Quote:
Originally Posted by toula
OP:
i asked my yard about 1099's when they switched their payout system, because they asked me for ID again, even though they knew exactly who i was. They laughed at me and told me they were not doing it. i suppose the potential is there in the event of an audit, but i do believe they have enough working knowledge to protect themselves as well as any significant vendors who provide them with enough scrap.