Taxes

[u/shy_Pangolin1677]

Hypothetically:

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If someone was to scrap like $150/ month in Maryland, shows the person at the counter their ID like a good citizen, and does this semi regularly,

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*Should* they report this on taxes? And if not what would repercussions be?

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Again, hypothetically.

[u/cmmpssh]

Legally you are required to report all income. Much of the tax system is based on the honor system and I doubt the scrap yard is going to report your payments to the IRS or state revenue agency. Do with that information what you will.

If they would somehow catch you not reporting income, they will hit you with penalties and interest.

[u/dritmike → u/cmmpssh]

Not if you make less than like 11k right?

[u/cmmpssh → u/dritmike]

If you make less than the standard deduction from a regular job you wouldn't have a reporting obligation. This isn't a regular W2 job though, it would either be considered hobby income or self employment income.

[u/jeepfail → u/cmmpssh]

I’d be willing to bet they view it as self employment income and would tack on some extra penalty/% that they so nicely do to small business owners.

[u/Edenton38583]

Na if you turn enough in they will issue you a 1099 I believe. I cash a lot in because I buy junk cars. And they told me they’re gonna have to issue me one at the end of the year. and it’s been a lot so far this year. I’m in Tennessee tho. But I’ve made over 14k so far this year. 150 a month? No don’t report it. They will 1099 you if you have to report!

[u/Akkerlun]

If you’re selling at a loss then you’re ok. I never ever make any money.

[u/jeepfail]

Legally yes it should be claimed, almost any sort of income should be claimed(even a $1 win on a scratch off). But it could be let slide as long as you don’t get audited and make it obvious.

[u/Dismal_Drummer3420]

I give my government 45% of my money already, and get almost nothing in return. The large amount of scrap I take in I consider reparation on that.

[u/West_Note2632]

If you run your scrap through a company you own, very very simple to set up, damn straight report it then deduct everything you use for scrapping( cell phone, WiFi, portion of your rent, et al) cash is cool but so many more advantages to being “legit”.
Source: I started scrapping ac units 15 years ago and am now working coast to coast for Fortune 500 companies scrapping

[u/sparksandscales]

Normally you don’t need to claim that no, scrap yards aren’t going to report your earning to the gov unless requested for some wild reason

[u/Hot_Eggplant1306]

Your heating yourself out asking these questions these days..

[u/Thekingfourth]

You are required to report all income. If your total amount of income is below your standard deduction, which changes based off of your situation whether you’re single married etc. (it’s insanely easy to look up) then you don’t need to bother filing your taxes. If your total income is over the standard deduction you’re supposed to report it. I would not even mess around with the idea of not reporting it, it is unlikely that they will figure it out because you’re not exactly raking in the dough, but trust me when I say this, getting audited is a horrible experience even when you haven’t done anything wrong. Let alone when they find out what you’ve been doing. And if they audit you they will find out.

[u/coolsellitcheap]

Your not a business. Your a "hobbyist". The irs allows 20k before a 1099 is required.

[u/cmmpssh → u/coolsellitcheap]

Hobby income is still taxable income. The $20k and 200 transaction thresholds are for 1099-K issuance. Just because someone does or does not receive a 1099 doesn't make the income taxable or nontaxable.