Paying tax on stringing

domosborn · 10-27-2012, 01:06 PM

So just out of interest do you guys pay tax on the money you make stringing? I havent started making money yet and I was wondering whether if i do start whether ill have to pay tax...

Ramon · 10-27-2012, 01:57 PM

If you follow the letter of the law, you technically have to pay income tax on any money you earn whether it is a business or a hobby. Of course, you can also deduct expenses to the extent of earnings if it's a business. If it's a hobby, deductions are a little tougher because they are itemized deductions with a 2% AGI threshold, so if you don't have enough other deductions, you'll take a standard deduction instead and still pay tax on the all the earnings.

I really don't know how many people report earnings from stringing if it's a small amount. How many waiters do you think report all of their tips? The tax law says you have to pay tax on interest from a bank account even if it's so low that the bank didn't even bother to send you a statement. The tax law also says that if you barter (ex. you string your neighbor's racquet, and in exchange, he washes your car) you both have to pay tax on the fair market value of the services you provided to each other. In all these cases you are violating the law if you do not report them as taxable events.

mikeler · 10-27-2012, 04:25 PM

Quote:

Originally Posted by Ramon

If you follow the letter of the law, you technically have to pay income tax on any money you earn whether it is a business or a hobby. Of course, you can also deduct expenses to the extent of earnings if it's a business. If it's a hobby, deductions are a little tougher because they are itemized deductions with a 2% AGI threshold, so if you don't have enough other deductions, you'll take a standard deduction instead and still pay tax on the all the earnings.

I really don't know how many people report earnings from stringing if it's a small amount. How many waiters do you think report all of their tips? The tax law says you have to pay tax on interest from a bank account even if it's so low that the bank didn't even bother to send you a statement. The tax law also says that if you barter (ex. you string your neighbor's racquet, and in exchange, he washes your car) you both have to pay tax on the fair market value of the services you provided to each other. In all these cases you are violating the law if you do not report them as taxable events.

And many states say you have to pay sales tax on Internet purchases.

shissncg · 10-29-2012, 07:26 AM

Yep. I was a registered business in CT (not specifically for stringing) and always declared any income from stringing and paid appropriate taxes. Doing so allows you to take appropriate deductions. Also, nobody want to get audited

seekay · 10-29-2012, 07:52 AM

I registered with the state a few months ago so I'd be able to deduct my new stringing machine as a business expense. And I figured it would be good to make things official before I started advertising (which is another way of saying nobody wants to get audited).

I'm not sure about other states, but Illinois requires that I collect sales tax on "general merchandise." Since that doesn't include labor, it's not a big deal, but I have to send in a small payment every quarter for 8.75% of all the strings and overgrips I sell.

domosborn · 10-29-2012, 08:59 AM

okie doke, thanks for the info guys, anybody who is UK based have any ideas also? I doubt i'll be making enough to hit the threshold right? right?!!

jjaded · 10-29-2012, 08:18 PM

Quote:

Originally Posted by seekay

I registered with the state a few months ago so I'd be able to deduct my new stringing machine as a business expense. And I figured it would be good to make things official before I started advertising (which is another way of saying nobody wants to get audited).

If you're really concerned about getting audited the stringing machine should likely be treated as a capital, not a current expense.

P.S. I realize this a ridiculous first post and an equally ridiculous point.

seekay · 10-30-2012, 07:33 AM

Quote:

Originally Posted by jjaded

If you're really concerned about getting audited the stringing machine should likely be treated as a capital, not a current expense.

P.S. I realize this a ridiculous first post and an equally ridiculous point.

Thanks, that's good info. I'm going to let a professional do my taxes this year to try and make sure I get all those nuances right.

And welcome to the board!

usta2050 · 10-31-2012, 07:23 PM

as long as you don't give out receipts and it's hard to prove, IRS won't come after u. it's not worth their time and efforts.

like most people, they want to get promoted and earn more so they want to focus on the big offenders.

10-27-2012, 01:06 PM	#1
domosborn Rookie Join Date: Mar 2010 Posts: 186	Paying tax on stringing So just out of interest do you guys pay tax on the money you make stringing? I havent started making money yet and I was wondering whether if i do start whether ill have to pay tax... __________________ PS 85, K90 or 3x MG prestige mid, all with pros pro untextured mains and hexaspin twist crosses- 52lbs

10-27-2012, 01:57 PM	#2
Ramon Hall Of Fame Join Date: Sep 2011 Location: Florida Posts: 2,131	If you follow the letter of the law, you technically have to pay income tax on any money you earn whether it is a business or a hobby. Of course, you can also deduct expenses to the extent of earnings if it's a business. If it's a hobby, deductions are a little tougher because they are itemized deductions with a 2% AGI threshold, so if you don't have enough other deductions, you'll take a standard deduction instead and still pay tax on the all the earnings. I really don't know how many people report earnings from stringing if it's a small amount. How many waiters do you think report all of their tips? The tax law says you have to pay tax on interest from a bank account even if it's so low that the bank didn't even bother to send you a statement. The tax law also says that if you barter (ex. you string your neighbor's racquet, and in exchange, he washes your car) you both have to pay tax on the fair market value of the services you provided to each other. In all these cases you are violating the law if you do not report them as taxable events. Last edited by Ramon : 10-27-2012 at 02:28 PM.

10-29-2012, 07:52 AM	#5
seekay Rookie Join Date: Dec 2011 Location: Illinois Posts: 190	I registered with the state a few months ago so I'd be able to deduct my new stringing machine as a business expense. And I figured it would be good to make things official before I started advertising (which is another way of saying nobody wants to get audited). I'm not sure about other states, but Illinois requires that I collect sales tax on "general merchandise." Since that doesn't include labor, it's not a big deal, but I have to send in a small payment every quarter for 8.75% of all the strings and overgrips I sell. __________________ USRSA MRT - K Six.One 95 16x18

10-29-2012, 08:59 AM	#6
domosborn Rookie Join Date: Mar 2010 Posts: 186	okie doke, thanks for the info guys, anybody who is UK based have any ideas also? I doubt i'll be making enough to hit the threshold right? right?!! __________________ PS 85, K90 or 3x MG prestige mid, all with pros pro untextured mains and hexaspin twist crosses- 52lbs

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