Saving Those Receipts For Tax-Time:

Sounds like you have a good idea on what to keep track of and how to file Schedule C and all that happy crap. You may want to register a trade name, DBA or whatever your state requires to make things legit. Also Turbo Tax Business is cheap and makes it easy...I used to do my own taxes but started using TT about 6-8 years ago.

I cannot speak for every state, but for VA, whether you work under a business name or not, you are considered self employeed if you are earning money, working for yourself.

It is true, you are TAX EXEMPT if your GROSS income is UNDER a certain amount.

How ever, I don't play the IRS bs games. I file my taxes every year, REGARDLESS of how much money I make.

I scan each receipt at the end of the day, and then put them into different folders on an external hard drive. I do this every month to keep track on what money each month is spent on what.

Then, to make my H&R BLOCK accountant happy, I take ALL the receipts and combine them all for the year, into other folders. This way, she has to go into "Gas" and see all my gas receipts for the year...goes into "landfill" and sees all my tickets of money I spend unloading junk, etc.

Holy tax crap scrapman. :eek:

Try and say that three times !

Originally Posted by eesakiwi

I took a $150 microwave & sold it for the $7 Copper value, does that mean I made $143 loss?......

It's your math, stick with it! I like this new math!

Now this is a good thread. One I hope we all can learn something from one another.
I was told by a tax "expert" that your credit card statements from the bank are considered an official tax document as far as showing fuel, repairs, tool purchases, etc..( I'm not yet sure if this is true as I haven't tried it yet, but I was considering using them this year).

Also the same with the cell phone and internet payments. As for the mileage driven I've been told to just write it down on a calendar daily and this also will pass as an official document. Again I'm not sure if this is true just what I've been told. If anyone knows for sure please feel free to comment on this.

As for the 1099 the scrap yard is supposed to report those earnings to the feds. and it is our own responsibility to pay our taxes (if owed) on the money. I for one am looking forward to the 1099 coming in this year. I think when it does a whole lot of the tweaker types will be surprised. And hopefully slow them down next year. But then again if they don't file on this money it will be up to the IRS to go after them. Are they really gonna take the time and expenses to go after each and every one of them? Doubt it.

I just keep a record of vehicle mileage on a word document - Jan 1 and Dec 31. That's if your vehicle is used ONLY for business. Otherwise, you can keep a daily log on a calendar or whatever. Yes, the IRS will "go after" the non-reporters of 1099 income. They simply send you a notice that you miscalculated (if they think it might have been a mistake on you part - like not including income reported on 1099). They will have amended your form and you owe ($$$$); plus penalties and interest. There's really not that much agent time or expense involved - it's all automated. This actually worked to my benefit last year. They recalculated my taxes and sent me several hundred dollars back as Overpaid Taxes. Now, if they suspect fraud, that's a whole separate discussion.

Mick, I don't doubt you one bit. I sure hope they go after some the "unethical" scrappers in my area. I'm sure it would be a boost to the more honest guys here.

If the yard issues 1099's and the scrappers don't claim it, all you'll have to do is sit back and wait. My brother learned the hard way.

As for the mileage driven I've been told to just write it down on a calendar daily and this also will pass as an official document

That's pretty much what truck driver do but they use a more official form. It's called a log book if you want to start using one. You can confuse the h*ll out of most people when looking at one filled out. When I hauled campers I would get back home from a trip and be finishing up my log book and it would "legally" say I was still in Ill. or Ky. 300 or 400 miles from home. lol

That's correct MDG, one or the other. Most cases the mileage deduction works best and if played right, will actually put money in your pocket, money you don't have to claim as income...the best kind.

Depends on which comes out more. If you had more breakdowns and repairs, then that way would be the way to go.