New Guy
I can tell you as a scrap metal yard cashier. I have been with my company five years and have never been contacted by the government regarding an audit on any of my customers whether they are are a company or just your average JOe cleaning out his garage. Now I do have employees that use the money they recieve as incopme and at the end of every year come to me for a report showing all the scrap that they have brough in for the year and how much money they received.
Experienced Scrapper
Great post. I love the idea of a flat tax. I think we'd agree on most things. However, when I see a bunch of lazy lowlifes getting handed everything to them, it's nice to know that there is at least one way that the average American can get a little extra without the government magnifying glass picking them apart. I am not a professional scrapper and I pay over $20k a year in taxes. Absolutely no one pays tax on every penny of their income. What this country needs is a nationwide money management course and a mandatory drug test with every welfare check.Originally Posted by PistoneScrapProcessing
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I know in my local area and maybe for all of GA I have to hand over my drivers license. That is for identification and trying to catch scrap thiefs then the IRS. You are more likely to get a knock on the door from an investigator then the IRS.
If you do this as a "hobby" you don't have to claim the income unless you make over a certain amount. Flip side is you can't take your losses either.
For me the "Fair Tax" is the best answer that will never be enacted. Here's a link that explains how it would work. Mike.
http://www.fairtax.org/site/PageServer
"Profit begins when you buy NOT when you sell." {quote passed down to me from a wise man}
Now go beat the copper out of something, Miked
Metal Recycling Entrepreneur
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I find it best to report all of my scrap income, along with contract labor and sales, and just work the deductions....save all receipts to back them up. Been dealing with IRS since 1990. Never been audited
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I'm curious - What is a "professional scrapper"? And should an "unprofessional scrapper" not pay taxes on his or her sales?
People may laugh at me, but that's ok. I laugh all the way to the bank.
Experienced Scrapper
I would say a "professional scrapper" is someone that makes all or most of his/her income from scrapping. I remember I installed a sink for my neighbor when I was 17 and she gave me $50, but I didn't and still don't consider myself a "professional plumber". I didn't pay taxes on that income, by the way. According to the law, every scrapper should pay taxes on their sales. That doesn't mean everyone will. This thread has turned into a discussion of right or wrong, but it originated with a question requiring a "yes" or "no".
Experienced Scrapper
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Hey that hurts! And here I was staying out of this one!
When the white man discovered this country Indians were running it
no taxes, no debt, women did all the work.
White man thought he could improve on a system like this. - Old Cherokee saying
I did not surrender, they took my horse and made him surrender. - Lone Watie
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The IRS requires that everyone who has an earned income above a certain amount file an income tax return. The exact amount of income required to file varies depending on a person's specific situation, but people with a self-employed income over $400 must file a return. The IRS considers those selling scrap metal as self-employed. Even if a person does not make $400 from the sale of scrap metal, but files a return due to income from other sources, the person must report the income from the scrap metal sales.
Reporting
While many scrap metal sellers feel there is little chance of getting caught not reporting income from the sale of scrap metal as scrap metal processors do not report small transactions to the IRS, the processors must keep strict records of purchases in most states. States require these records as a way of identifying those sellers who may have stolen the scrap metal. However, if the IRS or a state tax agency would audit the scrap processor, the auditor may review these records and find sellers of scrap metal who did not report the income from the sale.
Penalties
The possible penalties for failing to report all taxable income to the IRS varies. If the IRS finds that a person failed to report income, the IRS will amend that person's tax return to include the income and will add penalties for failing to report income. The amount due would also accrue interest from the date the return was due to the time the person pays the taxes. In more serious cases, criminal prosecution may occur which could result in substantial fines and incarceration.
Business Expenses
While a person selling scrap metal does have to report this income to the IRS, most scrap metal sellers will also have many tax deductible expenses which will lower the amount of taxes owed. For example, a person who collects scrap metal from various sites and delivers the metal to a scrap buyer can deduct mileage expenses which will reduce his taxes. Some other possible deductions might be the purchase of gloves, trash bags, wire strippers or other equipment used to collect and process the scrap metal.
I have only been scrapping since Sept. I already owned my own business in another field at the time. In Jan of this year I rec'd a business lic., permits, etc for scrapping. I track everything in and out. I will get deductions for business cost, my mortgage (home office), utilities, vehicles, etc...anything I already owned but now has some place in this new business.
I know this is a lot for most to consider, being a VA and in business all my life makes all this stuff natural for me. I am running everything in my new venture as any legitimate business would.
Also, by doing it this way...1 click and I have a report on Expense vs Income, I know what ads are producing and which ads are useless, reports on who is calling and who is not, which yards are paying me better, etc, etc.
Last edited by ixcelr84scraps; 01-26-2012 at 10:46 PM.
scoundrel
what software do you use? I do everything manually in excel but it takes a lot of work.
Metal Recycling Entrepreneur
your local scrap yard claims all of their expenditures against their reported income. which means they are reporting all of your sales as as an expenditure. they report that to the same irs that you are not reporting your income to.
the irs requires you to report that income.
simply because you have not been located with in the system to date, does not mean you will not be. the irs is working on cross referencing expenditures. and you are liable for any past unreported taxes, penalty's and interest.
many states require the yard to generate a 1099 for any accumulated sales exceeding $600. if your state has not done that yet, any bet that they will in the near future?
the govt has noticed that there is a large amount of money passing hands and they have not collected income tax on it. do you really think that one of our politicians is going to allow that to continue?
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QuickBooks Pro
Metal Recycling Entrepreneur
Originally Posted by PistoneScrapProcessing
47 percent of Americans pay no taxes and get a refund there should be no refunds everyone should pay something this country might be free but when I pay 30 grand in taxes and you pay zero who is getting the shaft and who is getting something for nothing. I am all for the flat tax and enacting a VAT. <<
there is a very small percentage of folks who pay no income tax and receive a eic check. there is a larger percentage who paid income tax and received a refund equal to or greater than the amount they paid in.
most americans pay a variety of taxes. at an equal rate, regardless of income.
most company's, corporations and wealthy individuals are simply the administrators of our tax money. these company's calculate their taxable rate into the price of their product. you, the consumer, pay that tax. the company simply collects the money and sends it in.
walmart pays an enormous amount of sales tax every year. or do they.
while you are complaining about taxes. can we discuss the subsidies that we pay the oil and gas company's? or the farmers? those subsidies are paid from tax dollars. your tax dollars.
i used to complain about the amount of taxes i paid. ok. i still do. but. i am thankful that i have earned enough to pay taxes.
it beats being broke any day.
best of luck with that flat tax rate. the wealthy will never go for it. a 10% flat tax on a 100 million revenue would be far more than is being paid under the current system.
it is true that we have the highest corporate tax rate in the world. what no one ever discusses, is that we have the most allowable deductions resulting in the lowest adjusted tax amount as well.
it is how folks like gates and buffett can pay so little on the vast amounts they made. ask them to pay the same rates as some of us do and see what you get for an answer.
the social security cap is 106,000 or so. just think how much more the wealthy would have to be pay if there was no cap. can you imagine how loud the wealthy would scream if that had to pay that on every dollar.
there is more than one side to this issue. i don't see any equitable solution coming out of washington. in fact, i don't see any solutions coming out of washington at all.
regardless of who the next president is, it is the children in congress who created these problems and continue to create more. until we change that, we will be stuck with what we have.
Medewgood, check out a few of the various watchdog groups websites. Even politicians use that number all the time so do some research oh I don't know maybe google "what percentage of Americans pay no federal income tax. Oh and what was that movement that was the opposite of occupy wall street oh snaps that right it was called we are the 53 percent. Meaning they represented the 53 percent of Americans that paid taxes. I paid 22,500 federal last year and 3000 state not including my earning tax and personnel property. 2011 taxes are probably 30000 plus and my taxes this year are going to be around 50 grand so I guess I am not working and lazy. I do more work by 8 am then you do all day and we cut 1100 gross ton this month and used 700000 cubic feet of oxygen and a 1000 gallons of propane and there's still two more working calendar days to this month. So the next time you want to say I don't work come walk two feet in my shoes you would quit before I got my first sip of coffee down or you got a third degree burn whichever comes first.
Experienced Scrapper
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PSP, calm down...you sound like an angry, defensive braggart. We are family....we shouldn't talk to each other this way. Noobs will think we're disfunctional. lol
Sorry I get defensive when someone accuse me of being lazy when I am far from it. I have worked my butt off to get to where I am at from where I have come from and I get real pissed when someone accuses me of being on the lazy side.
Metal Recycling Entrepreneur
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When we got the mandatory ID at scrap yards law a couple of years ago (in Ohio), signs were posted that said explicitly that it was not for tax reporting.
It's really up to the individual to report.
I'd advise not having $100K in your bank account or any major purchases if you plan not to file.
You could be investigated as a drug dealer, terrorist, etc.
Not just a guy trying to make a living.
/2 cents
You must file taxes if you earn the following amounts of income:
Self-employed, any age: $400
Children and Teens classified as a dependent: $5,700
Single, under 65: $9,350
Single, over 65: $10,750
Married, filing jointly, both spouses under 65: $18,700
Married, filing jointly, one spouse over 65: $19,850
Married, filing jointly, both spouses over 65: $20,900
Married, filing separately, any age: $3,650
Source: TurboTax Support website
that is in the USA
something interesting: In Canada I must report ANY income I make even if it is $50 BUT in the province of Ontario the first $30,000 a year I make while "recycling" is exempt from taxing. so I pay my employees -(wife) and make sure I keep every recite so that I only make that much.
oh yeah I almost forgot. the IRS contacted my dad and since he has lived in Canada for the last 30 years he has not ever filled out his American taxes. he now has a choice get the last 6 years of his $0.00 income taxes reported or he may go to jail....lol thought that was funny. he will be filing his taxes.
Last edited by jackshmuc; 01-28-2012 at 04:55 PM.
You mean we're not?! O_o
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