OT: Do you use a bookkeeper or accountant? Why or why not?

[btcarfagno]

Originally Posted by GrayGhost

I do a schedule C, tho its very small and most of my stuff is a cash business. I am an accountant by trade, so if anyone wants advice on how to handle things, you can message me. Also, constant "losses" on Schedule C, whether real or "padded" are a flag for the IRS.

BTW, if you just buy and sell as a hobby, you are supposed to list the sales on the other income line of your return, not subject to SS tax and can only deduct expenses up to the amt of sales, and on Schedule A, as a misc itemized deduction. , which is subject to AGI limits.

also, a "Random sale" of a large item, not in the business, could be considered a collectible capital gain, taxed at 28 pct

Excellent thoughts Scott and dead on with regard to the different ways that can or should be used to report income.

I come from a background as an IRS audit specialist. This is really where I got my idea from. It is amazing how ill prepared most people are for an audit from the IRS. While some audits are very casual and easy to fend off, others are downright intense and intrusive. In both cases, however, the best defense against the IRS is a clean set of books.

There is always the chance that someone never does get audited. If so, that is wonderful. But why take the risk? To me, it is like saying it is ok to live an unhealthy lifestyle because there is a chance that you won't get sick. While true, it may not be the best idea.

Anyway, thank you for the input Scott. Hope you don't mind if I bounce a few questions off you every once in a while.

Tom C

[glynparson]

I believe he does a great job for me and my businesses.If anyone in Eastern PA wants a reccomendation for an accountant please feel free to PM me. I will give you his name and contact information.

[glchen]

I use Schedule C within TurboTax Home/Business. Frankly, I don't know if there would be much of a market for an accountant specializing in the collectibles industry since it would be so small. However, I think there would be market for a small software application or app, which would organize this information for you, for tax purposes. For example, if there would be some easy way to dump buy and sell information from ebay into a format which would allow you to easily fill out the Schedule C, I think there would be demand for that. If the program would have additional flexibility where you could also enter off-ebay transactions such as purchases and consignments to auction houses, and where you could split lots up into individual items, that would be great.

[sycks22]

I use quickbooks as well as an excel spreadsheet. It's a nice combo that has me covered a couple ways.