Help!! Audited on my 2021 Taxes over baseball cards!!

[bobbyw8469]

Dang Jeffrey. That sounds like a nightmare.

[theshowandme]

Just looked, I paid $196 for a CPA at H&R Block to review my taxes.

My situation is not all that uncommon but I wanted the extra set of eyes.

It helps me sleep better.

1. W2 employee
2. 1099-K from PayPal
3. 1099-K from eBay
4. Brokerage account sales, dividends, interest, etc.

They found a few extra hundred bucks to deduct once I sent it to them for their review.

It was beautiful!

Pay the CPA!

[bobbyw8469]

Originally Posted by theshowandme

Just looked, I paid $196 for a CPA at H&R Block to review my taxes.

My situation is not all that uncommon but I wanted the extra set of eyes.

It helps me sleep better.

1. W2 employee
2. 1099-K from PayPal
3. 1099-K from eBay
4. Brokerage account sales, dividends, interest, etc.

They found a few extra hundred bucks to deduct once I sent it to them for their review.

It was beautiful!

Pay the CPA!

Thank you! I used to pay the CPA. I forget what made me stop going to him. I felt like he didn't understand the nuances behind it. You can deduct a portion of your house, your electric bill, etc.

[rhettyeakley]

Hopefully you didn’t try to report a “loss” and tried to take a ton of deductions to offset your regular income. I am not a CPA but that is always a bad idea.

I do use a CPA but they have been very upfront with me about what I am supposed to be doing and what is and isn’t allowed.

[bobbyw8469]

Originally Posted by rhettyeakley

Hopefully you didn’t try to report a “loss” and tried to take a ton of deductions to offset your regular income. I am not a CPA but that is always a bad idea.

I do use a CPA but they have been very upfront with me about what I am supposed to be doing and what is and isn’t allowed.

I did lose money on some cards. I took no deductions that weren't allowed. Bubble Mailers, PO Box, VCP subscription, Ebay fees, Paypal fees, etc.

[Snowman]

In my experience, most of the work is actually in being able to track down and produce all the records you need, regardless of whether you hire a CPA or not. I was audited several years back for poker winnings, and I handled everything myself. I would do the same again if I am ever audited for selling sports cards. But I also keep meticulous records and I don't try to write off shady shit.

[bobbyw8469]

Originally Posted by Snowman

In my experience, most of the work is actually in being able to track down and produce all the records you need, regardless of whether you hire a CPA or not. I was audited several years back for poker winnings, and I handled everything myself. I would do the same again if I am ever audited for selling sports cards. But I also keep meticulous records and I don't try to write off shady shit.

I don't write off shady shit, but my record keeping skills suck big time. About the only things I'm good at is saving old invoices. And even that is hit or miss.

[Snowman]

Originally Posted by bobbyw8469

I don't write off shady shit, but my record keeping skills suck big time. About the only things I'm good at is saving old invoices. And even that is hit or miss.

You should be OK then. You just need to download all your eBay activity and get your bank records for any accounts you use and all your receipts. You can request data from ebay. It takes a few days for them to create a downloadable report for you. But it will have everything you need, buying and selling, with all the fees itemized.

[Keith H. Thompson]

too expensive. Then a couple of years ago. I got a 1099-K from eBay reflecting 50K in sales. I immediately went to a CPA firm. There are many ways to deal with this, but we decided to go with Schedule C. As Calvindog points out, there is a ton of legwork, but there are also so many legitimate "expenses" including cost of inventory. And it gets easier and more routine every year.

[calvindog]

Originally Posted by bobbyw8469

Dang Jeffrey. That sounds like a nightmare.

It was a nightmare doing the work of finding every purchase and sale. But the agent was utterly ignorant of baseball cards and how they are bought and sold. That ignorance helped me plenty.

[Smarti5051]

The statement that you can get audited by entities other than the IRS is so true. I got audited by the CA EDD for my small business (3 family employee operation). The process took 18 months, at least 150 hours of my time, $5000 for my accountant and an additional assessment of $14.28, inclusive of interest and penalties. If they would have offered to settle for $5000 at the outset (even though I owed zero), I would have taken it.