Jim Henderson wrote:
> On Thu, 02 Apr 2009 20:08:08 -0700, Darren New wrote:
> 
>> Jim Henderson wrote:
>>> That's sales tax, not income tax.
>> That's not what I'm talking about.  I'm talking about income tax.
> 
> So am I.  But you said:
> 
> "Otherwise, you wouldn't pay income tax if you had 10,000 customers a 
> year each buy $20 of stuff from you."
> 
> *That* is sales tax.

I'm confused. I said income tax, you said sales tax. The two are unrelated.

> Does *anyone* think the tax laws make sense?  I sure don't.

I'm pretty sure the owner of the local gas station pays income tax, even tho 
he *never* gets a 1099, yes?

> Well, like I said, I'd have to check with our treasurer.  She said she 
> "got it sorted out with the state", so I assume the state issued the 
> certificate, and the feds accept that.

That's possible, but the designation as a 503(c) organization is an IRS thing.

>>>> Did you take them as an individual, or a corporation, or what?
>>> Individual.
>> Well, a corporation has to report everything, even if they don't get a
>> 1099.
> 
> Yes, but we were talking about individual income tax?

Yes.

> Oh, wait, I think I see now where the misunderstanding is.  We're talking 
> at cross-purposes again.  We got on the subject of income tax and I 
> assumed "individual" and you are talking about for an entity, not an 
> individual.

I'm talking about both. If your job is buying $50 parts, fixing them, and 
selling them for $100 on eBay, and you make $100,000 a year doing that, are 
you paying income tax? Sure. Who reports your sales to the IRS? Nobody but 
you. That's what I'm saying.

>> Now, if it's <$600, you don't get a 1099 at all, but I'm pretty sure
>> that doesn't *legally* let you off the hook for reporting it. It just
>> means the IRS isn't going to be able to catch you easily.
> 
> I got a 1099 for <$600.
> 
> But I suppose "not going to be able to catch you easily" also translates 
> to "not worth their while".

Possibly. But I'm trying to distinguish between "practically get in trouble" 
and "is illegal."  If I rent a DVD and show it on the big-screen TV at my 
sports bar, I'm also violating copyrights legally and also unlikely to get 
in trouble for it.

> But on my individual income taxes back when I got the advance (which was 
> more than $600 and I got nailed for the taxes, or would have if the 
> expenditure hadn't been tax-deductible), I talked to a tax accountant 
> about the situation, and he explained it to me then.

It's possibly because it was an advance, and you would have had to pay it 
back had you not finished the book, or something like that. I.e., it might 
have had nothing to do with the amount and more to do with when you were 
officially booking the income.

> Now I'll have to find the form.   It may be that I'm just remembering the 
> boxes saying "0" for what was owed on it.

1099's don't have a "how much you owe" box on them. Just google for "form 
1099" and suck it down off the IRS website.

> Nonfiction books for a very small segment of a targeted market segment 
> tend not to be real moneymakers.  Just a good way to get your name known

Sounds that way. :-)

>> I do love box 13 for 2009: "Excess Golden Parachute Payments."
> LOL, that's a good one.

I think it's the whole AIG thing.

-- 
   Darren New, San Diego CA, USA (PST)
   There's no CD like OCD, there's no CD I knoooow!

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