botting and taxes

I was wondering if anybody could give me information on taxes on botting. If I make 3g a month botting and buy a house what would happen if I got audited?

 

How do you plan to buy a house? You need to declare income to a bank to secure a mortgage, so you better have a good sales portfolio lined up. If a bank sees it as income, you'd better report it to the IRS as well. The last thing you want is to start a family with a credit score in the 400s and explain to your wife you tax evaded some money you made on Runescape.

 

I have no problem reporting the money I made but is there a legal way to do it? could I say I speculated on online goods and made the money that way. is that legal?

 

Well a bank is going to want to know specifics. They're probably not going to just let you get by with online good speculation. I highly doubt a bank is going to give you a mortgage on the premise that you sell MMORPG currencies either. That is probably seen as high risk considering the market can bottom out at the drop of a hat. You could possibly consult with a CPA and see what they say.

 

The legal way to report it is to be honest. You provided a service for online-gaming customers. You can go into more details if you want, and you should if they ask. There's nothing illegal about trading RS currency, as long as you follow Paypal's terms and declare it all. It won't hurt to spend a few bucks to get a business license and set up your own website to seem even more established.

Nero's probably got the best advice by saying you should consult with a CPA about it. I did declare a few ten G's as income for my bank and for the IRS, but I didn't do anything near the scale you are talking about.

 

appreciate all the advice guys. ill probly be getting in a rent to own house so I dont think they'll be nearly as strict as a mortage would be.

 

For the record, getting a house usually involves getting a 30-year mortgage if you don't have a mortgage on your credit history. I'm extremely doubtful that Runescape will even exist in 2042, so I don't think botting can really be used as a substantial income source at all. They want to see either a contract from an employer explaining you can expect to have continual employment or have you demonstrate many years of running your own business.

 

Always save 30% of your income if you plan on ever having to claim it on taxes(it might be more if you claim it as business). You better be sure that the IRS will be coming after you for it. I would think (I'm not a expert by any means) that as long as you claim it as income and pay the taxes for it, you shouldn't have a problem with the IRS. I do doubt however that if you are using this is income for a long period of time (15-30 years for a mortgage) that it's a good Idea, as runescape will most defiantly be gone before then.

 

never said im botting on runescape and I plan on renting to own and paying it off in 5 years. botting is not a main form of income for me I freelance in anything I can make money on. I was just wondering what do to about taxes and virtual bussiness but you guys have pushed me in the right direction

 

Which means you don't actually have a job? Which would mean a bank probably isn't going to give you a loan or is going to give you an extremely high interest rate loan.

 

You're in the US right? Pay your taxes, citizen, or the IRS will tear you a new one.

 

I'm sure the bank will consider you high risk, maybe if you had a little side job for a few days a week they might consider you.