Scrapping taxes / audits

Has anyone ever been audited and forced to pay tax on income earned from scrapping? I'm from Illinois, if that matters. I've been paid in both checks and cash over the last year, but only had to show my ID twice on two non-consecutive occasions. I'm just wondering if and how they are recording the sales.

We should be getting tax credits for all the stuff we keep out of the landfills. You betcha

Can I assume that I asked a silly question?

No silly questions sometimes unusual answers.

Originally Posted by Mettler

Can I assume that I asked a silly question?

not at all

If I understand correctly, companies only need to report payouts for services rendered by other non-companies valued at over $600...So if you sold a yard 1k in scrap, shouldn't be an issue. If you did 1k worth of labor for them, you'll be getting a 1099*

*But I'm not an accountant and you should probably consult a professional

Originally Posted by KZBell

It's really up to the individual, so you need to do some research and make your mind up for yourself. Asking people to confess to tax evasion on a public forum is not doing research IMHO.

I wasn't asking if evading the tax was right or wrong. It's hard to research how many people were audited due to scrap metal income discrepancy. Admitting to being audited is kind of like admitting to speeding after you got a ticket.

Originally Posted by IronPirate

not at all

If I understand correctly, companies only need to report payouts for services rendered by other non-companies valued at over $600...So if you sold a yard 1k in scrap, shouldn't be an issue. If you did 1k worth of labor for them, you'll be getting a 1099*

*But I'm not an accountant and you should probably consult a professional

I like your answer. If that is (was) true, I think it may be changing for 2012. I've read that on any scrap sale over $600, there will be a 1099 issued. Whether or not that document will include the seller's name, I don't know.

Originally Posted by easyrecycle

well...damm if I can only take in $600 at a time that will be a few trips...last load I sent out was over 10 (CU & AL) and I never was given a 1099 or any docs that I had to fill out. So if I did not need to fill anything out and did not get anything in the mail...you should be fine.

What I will tell you...just keep a simple note book on how much you make and how much you spend like fuel and what not. Call your county tax office and ask them want is the reporting amount.

If you make under X amount a month/year there is no reporting you have to make as its nontaxable.

Thanks for the info. I don't think I'll be bothering my county tax office, though. I've had three loads of 316SS over 1,600 lbs this month alone, so I think I know what their answer will be.

Originally Posted by Mettler

I like your answer. If that is (was) true, I think it may be changing for 2012. I've read that on any scrap sale over $600, there will be a 1099 issued. Whether or not that document will include the seller's name, I don't know.

Oh yeah - didn't think of the 1099k thing. The laws were changed at the last minute so I think you're wrong on the mandatory over $600 reporting, but again I'm no expert. I've only been following it with regard to paypal (which reports over 20k in transactions).

I think everyone has to report over $20k in sales. BUT if you don't fill out a W-9 with someone, you will NOT get a 1099. The w-9 is to 1099 what w-4 is to w-2's.....10-4?

Originally Posted by easyrecycle

Fix for paypal...get another paypal account and switch them around.

I was thinking of that, but we spent so much this year on inventory and equipment, plus the 179 deduction for vehicles, I saved money declaring the income.

Have never filled out an w-9 form in my life all you need is a name, address, and social security number to 1099 a person or business. I have a solution to all your problems pay taxes on all your income earned and you don't have to worry about audits because you have nothing to hide. I also agree with the poster who said everyone should pay taxes. 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.

Sales tax isn't a 17.5 percent I am talking about a VAT not sales tax every state has that. We need a national VAT to stop the petty consumption by the people that by buy just to have it and slow down consumption. The rich got rich because they worked hard at it the problem now a days is no one wants to work hard they want there free stuff like everyday is there birthday. End all benefits to everyone accept the disabled and social security. Everyone pays taxes and has to have skin in the game or else this country gonna be turned over to our creditors.