Taxes and Runescape gold.

[wowman2]

Anyone have info on paying taxes on selling runescape gold?

This is not a thread asking for tax advice, simply on facts regarding the law.

1. Do you have to pay them on runescape gold if payment is sent as gift?

2. Does western union report to irs?
if so when, if not always?

3. Can irs track paypal under 20,000 or 200 transactions?
if so do you have to pay taxes on that?

Lastly, If taxes are required to be paid what section would I even put the revenue other? The "other" line perhaps?? Very confused.

Thanks

 

[Galaxy]

I don't have much to offer, but maybe sending Grave a message. Grave has a thread where you can ask all sorts of questions and I know he dealt with taxes and such...

 

[Heads447]

You may find this recent thread useful: http://www.sythe.org/market-discussion/1638998-paying-taxes-runescape-gold.html

 

[wowman2]

Thanks guys if you could keep the tips coming it would be great so I can come to decisions. Or even leave comments to the questions in the thread if you wish! thanks

 

Unless you're trading a substantial amount of gold and bringing in over $1k a month in profits from gold transactions I wouldn't even start to worry about it.

 

[wowman2]

I've surpassed that in a week.

 

[Galaxy]

I've surpassed that in a week.

Yup we have a badass over here...

 

[wowman2]

Not trying to be a badass.. trying to get answers..

 

[Galaxy]

Not trying to be a badass.. trying to get answers..

Sorry, more was commenting on thats an impressive amount and I couldn't skip that post without commenting. My sarcasm simply made me feel better about myself and lack of pulling in that kind of money...

 

[wowman2]

The 1k a week has of course been temporary haha. Just looking to stay legit though, dont wanna mess with the IRS. Didn't think I'd come into as much gold as I did.

 

1. Do you have to pay them on runescape gold if payment is sent as gift?

If you're trying to stay legit the money shouldn't be sent as a gift, as that cheats paypal out of the fee. The money should be send as a good or service. Obviously don't take paypal from people that you can't trust completely.

2. Does western union report to irs?

I don't think Western Union reports anything to the irs, paypal does after a certain amount however. If you want to stay completely legit then register as a business and report your earnings to the irs as if you get audited the irs can technically check Western Union payments.

3. Can irs track paypal under 20,000 or 200 transactions?

If you get audited probably, but they aren't going to look otherwise(and paypal won't report it under that amount).

if so do you have to pay taxes on that?

If you're making hundreds or thousands of dollars a month you're legally required to file taxes, yes.

 

[wowman2]

Thank you very much for those answers. I have only done business with paypal so far. To clarify, western union does not take your social security number or report your ID to the IRS for taxes? Also could that audit trace be tracked if it was a cash transfer and not a bank or wire transfer? Thanks!

 

[wowman2]

Nowhere near hundreds of thousands, or even tens of thousands haha. I would get an accountant if that was the case.

 

Thank you very much for those answers. I have only done business with paypal so far. To clarify, western union does not take your social security number or report your ID to the IRS for taxes? Also could that audit trace be tracked if it was a cash transfer and not a bank or wire transfer? Thanks!

As far as I'm aware western union does not.

Nowhere near hundreds of thousands, or even tens of thousands haha. I would get an accountant if that was the case.

Careful, no need to double post. Just click the edit button and add to your post if you want to add something =p

I said hundreds or thousands, which you said that you've been making.

 

[wowman2]

Sorry I misread, Thanks again for all your help!

 

[J E Parts]

Paypal doesn't report anything.

I have sold over £50k+ of certain goods via paypal and nothing has come of it (yet) <-- this was a few years ago. needed a cash boost and figured this was the best way to go

But anyways, just get an accountant to set you up as a business and simply use a simple accounting program to keep record of your money in --> money out (use sage one, that is a good platform).

And the accounting program should do everything regarding taxes etc etc and all that crap... Once you have your business then shit can happen tax evasion and all that, but with 1k a month tax evasion is not worth it so :/ lol.

All the best

 

[wowman2]

Say I just want to claim it as personal income? I don't receive a w2 because I am unemployed and no 1099 from paypal because doesn't exceed 20k. How would I legally list the income?

 

[J E Parts]

Say I just want to claim it as personal income? I don't receive a w2 because I am unemployed and no 1099 from paypal because doesn't exceed 20k. How would I legally list the income?

You would have to register as self employed, once that is done you will have to manually record all your transactions (You would need a business bank account etc etc)..

But it is advised that you use a software to do all your transaction records etc etc, also most softwares will sort the taxes out for you as a report so all you have to do is pay the tax man.

Also get an accountant to confirm anything you are unsure / been told because you need to get it right from the start.




EDIT = I am going from personal experience from the UK so it might be different in the US, but still I would highly advise getting an accountant to set you up properly and go from there.!

 

[wowman2]

Does it have to be an in person accountant? and what should I tell them because I thought selling runescape gold was illegal? should I tell them I gained the revenue from runescape gold?

 

[J E Parts]

Does it have to be an in person accountant? and what should I tell them because I thought selling runescape gold was illegal? should I tell them I gained the revenue from runescape gold?

No, not personal. Just ring up a local accountant company in your area and ask what they can offer for you as a start up etc etc....

No selling virtual items isn't illegal (I dont think).

Just explain your plan of either farming the gold or buying for cheap and selling for higher... And you would run all your expenses through it like cost for bots / cost for buying gold, and it would inturn count against your income tax etc etc.

Your best bet is to have a meeting with an accountant, make sure its a free consultation though haha.

Cheers bud!