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Old 04-20-2011, 11:41 AM   #26 (permalink)
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If you are on the low end I'm pretty sure you can do just fine without any papers.

Reconsider when you reach high traffic
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Old 04-20-2011, 11:50 AM   #27 (permalink)
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I wouldn't think you need to really do anything unless its high, high volume and high $$. Especially if its just singles.
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Old 04-20-2011, 12:47 PM   #28 (permalink)
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I can't believe some of the drastic replies I am reading on this thread lol. A guy selling baseball cards part time on eBay out of his basement doesn't need an LLC. Nobody is going to sue you over a baseball card, and no federal agency is going to take your house over one either. You are just as likely to get sued by a neighbor who slipped on your dog's poop as you are to get sued over a $20 baseball card. So unless you live alone in a padded room, your entire life from birth to death is a liability, and last I checked, you don't need an LLC to be born.
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Old 04-20-2011, 06:57 PM   #29 (permalink)
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-Talk to a CPA, then to an attorney licensed in your state. Even a half-hour consult from each should point you in the right direction. Your local society of CPAs in your state and state bar association should be able to help you.

Good luck to you.

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Old 04-20-2011, 07:32 PM   #30 (permalink)
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Depends on what $ range of singles you will be buying/selling. If low dollar 1-100 I would not worry too much about LLC's and sole pros unless you are selling 10 or so of those types of singles a week, and if thats the case then get an LLC. If you pay 800 then you pay 800, but if some azclown decides you bent him over then he can sue, but lets face it, if he's buying cards that low priced he won't want to sue because the attorney would cost 50 times as much as the card and most of those guys don't have the money to do that or the balls to consult an attorney on a baseball card suit of that low dollar figure.

If higher end stuff like 100-1,000 I would definitely go llc even if you only sell small amounts as those sales can rack up quickly and liability can go up, and those people usually have some means and brains to sue.

Either way consult an attorney in your state as well as a CPA.

Hit me when you get some Frank Thomas too lol.........
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Old 04-20-2011, 07:42 PM   #31 (permalink)
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Good advice. But the bases of suits is not monetary value, it is the "metal anguish" of a buyer pulling a fake patch or card not being a BGS gem 10 or even the $2.50 for shipping or card not in a steel top loader padded by foam in a metal box,etc...etc... etc...
Card value = $1 + "Mental anguish" =$1,000,000 for the buyer that works minimum wage with no diploma.... with a pro bono ambulance chasing Lawyer.
lol.....





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Depends on what $ range of singles you will be buying/selling. If low dollar 1-100 I would not worry too much about LLC's and sole pros unless you are selling 10 or so of those types of singles a week, and if thats the case then get an LLC. If you pay 800 then you pay 800, but if some azclown decides you bent him over then he can sue, but lets face it, if he's buying cards that low priced he won't want to sue because the attorney would cost 50 times as much as the card and most of those guys don't have the money to do that or the balls to consult an attorney on a baseball card suit of that low dollar figure.

If higher end stuff like 100-1,000 I would definitely go llc even if you only sell small amounts as those sales can rack up quickly and liability can go up, and those people usually have some means and brains to sue.

Either way consult an attorney in your state as well as a CPA.

Hit me when you get some Frank Thomas too lol.........
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Old 04-20-2011, 07:58 PM   #32 (permalink)
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Good advice. But the bases of suits is not monetary value, it is the "metal anguish" of a buyer pulling a fake patch or card not being a BGS gem 10 or even the $2.50 for shipping or card not in a steel top loader padded by foam in a metal box,etc...etc... etc...
Card value = $1 + "Mental anguish" =$1,000,000 for the buyer that works minimum wage with no diploma.... with a pro bono ambulance chasing Lawyer.
lol.....
I see your point I just have a hard time beleiving that a Judge is going to side with a buyer on the basis of Mental Anguish over a card that costs so little. It has a shot, but im a gamblin' man and I would be t a judge would throw it out unless there is some serious money exchanging hands. If it's high dollar then the buyer could say something like it affected his life or something. Oh well...good luck to ya buddy and I hope you sell me all your Thomas stuff.
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Old 04-20-2011, 08:13 PM   #33 (permalink)
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I'll tell you what my father in law (a CPA and my tax preparer) told me.

You don't need any of that stuff. Keep good records (he expanded on this a bit). At the end of the year, tell me what your profit was and I'll figure out the rest. If the IRS ever wants proof, show them the good records.

Basically, account for every penny, and have records to illustrate it.
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Old 04-20-2011, 08:47 PM   #34 (permalink)
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I'll tell you what my father in law (a CPA and my tax preparer) told me.

You don't need any of that stuff. Keep good records (he expanded on this a bit). At the end of the year, tell me what your profit was and I'll figure out the rest. If the IRS ever wants proof, show them the good records.

Basically, account for every penny, and have records to illustrate it.
Thank you for this down to earth and realistic post. You summed it up nicely. Keep good records, use Paypal shipping labels or DC at the post office so all your mail is accounted for, and you will be okay. The 1 in a million shot of getting sued isn't even worth discussing.
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Old 04-20-2011, 09:06 PM   #35 (permalink)
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-The attorney and cpa advice, and the corporate form/llc discussion, has mostly nothing to do with being sued. Though it is something to consider.

flow-through tax protection, deductions, profit and loss scenarios, not encumbering your personal assets on debts or claims, subjecting personal assets to conflict...

It can save you money. Or maybe it won't. Either way, when you make a decision like this, you should have all your options on the table and as much info as possible.

Oh, and after they speak with you, feel free to ignore their advice.

i'm not saying what they advise is best for what you envision or what you absolutely have to do. but don't discount it due to anonymous postings online. Get the information, consider it, and then move forward. As an example, a CPA would likely tell you that 'keeping good records' is not a qualified deduction on your taxes. Good general advice, but not on the plus side of avoiding using a corporate form for a significant business investment.

On a slightly-side note, typically, 'mental anguish' for being sold a product that was not delivered properly is not a compensable expense, dependent on jurisdiction. Breach of contract, sure, but intentional infliction of emotional distress it is not.

lobo_hacker, trying not to derail the thread too much

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Old 04-21-2011, 12:30 AM   #36 (permalink)
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Good info. But if a person can win millions by spilling Hot coffee on themself and get MILLIONS from Mcdonalds,&The best lawyer can get OJ off the hook,etcc... etc... Anything is possible when money,lawyers and politicians are involved.

As for keeping records and stuff. It is always essential. But if you treat selling cards as a "Business", just selling $10 a year the IRS will consider you a BUSINESS. Of course the IRS will not chase you over if you own nothing. But. that is what the few people that was "Downloading music" thought and they got sued $100,000's for a few songs by the music industry. It is always, "If you get caught".

To the OP, if you keep your "card" selling a hobby, KEEP IT A HOBBY. Once you treat it a Business, IT IS A BUSINESS. READ THE INFO ON THE IRS website.

As for liability, if you have alot to lose..... GO LLC ANYWAY! You can open wholesale accounts, tax deductions on expense, etc. etc.... Less Liability.

But what do i know, i am Neither am CPA or LAWYER. I just actually own businesses. (CPA cannot run a business if their life depended on it, A lawyer cannot run a business if their life depended on it, THAT IS WHY THE DO WHAT THEY DO, NOT RUN BUSINESSES) go figure...... Like the "BUSINESS" Professors that teach business in College, THE TELL you how to run a business but could not do it if THEY HAD TOO----> That is why the professor is teaching, NOT RUNNING A BUSINESS..lol


CONCLUSION---> Ask a actual business person what they do. Pros/Cons..


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On a slightly-side note, typically, 'mental anguish' for being sold a product that was not delivered properly is not a compensable expense, dependent on jurisdiction. Breach of contract, sure, but intentional infliction of emotional distress it is not.

lobo_hacker, trying not to derail the thread too much

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Old 04-21-2011, 12:58 AM   #37 (permalink)
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Awesome...this is great! Again, thanks for all your input...it's good to weigh the pros and cons of each option.

I did consult a few different CPA's and Lawyers in addition to my tax guy and right now Sole Proprietorship is the best route for me. If I expand and grow my business into profits of the 5 to 10,000 range I'll definately make the switch. As of now though, the laywers I spoke with recommended a sole proprietorship.

All of your guys' feedback was extremely helpful in helping me ask these lawyers questions. I threw a lot at them, and they clarified everything for me.

Personally, regarding the whole liability thing, one thing to remember is buying/selling sports card singles online is a low risk business. Those of you that pointed out that there are some goons who can go after you on ANYTHING are right.

I do agree with one of the previous posters that it's good to analyze the risk. Is he really gonna hire a lawyer and go after me with all the costs involved?? Doubtful...

Again, really appreciate both views and all replies.

Looking forward to getting going...
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Old 04-21-2011, 01:34 AM   #38 (permalink)
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to those of you stating that he doesn't have to create a LLC or sole pro. because of the low volume he would have....isn't one of the main points of creating a LLC or sole pro. with a sports cards business so that you can write off the expenses as business expenses and that way you are not losing profits on it?
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Old 04-21-2011, 02:07 AM   #39 (permalink)
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to those of you stating that he doesn't have to create a LLC or sole pro. because of the low volume he would have....isn't one of the main points of creating a LLC or sole pro. with a sports cards business so that you can write off the expenses as business expenses and that way you are not losing profits on it?
Deductions mean nothing if the business doesnt make money.

IMO . Its LLC or Hobby. No middle with Sole pro. Sole P is like taking the worst of both worlds Liability,taxing,regulations.

Fly under the radar until you make big profits. Registered Businesses are regulated and taxed more then a personal hobby. I went thru this with another "Hobby", i wish i never went BUSINESS! I wish i stayed "hobby".
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Old 04-21-2011, 09:44 AM   #40 (permalink)
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IMO . Its LLC or Hobby. No middle with Sole pro. Sole P is like taking the worst of both worlds Liability,taxing,regulations.
I do contract work for my county part time in addition to my full time job, so I am required to file Schedule C as a Sole P for that work. It takes 2 seconds to file and I'm done. Gross wage - business expenses = Net Pay which is then taxed. Pay my taxes and done. The taxing, liabilities, regulations etc. are nothing if you are making a few thousand extra cash as a contractor. The IRS is not chasing these people down. If I was making 75k as a contractor then yes there might be a different story.

You people continue to make it sound like it's a burden to be in business for yourself. Don't discourage the American dream. There are more Sole P's in this country than you realize. Technically, if you fix your neighbor's car and he pays you $200, you are a sole proprietor. You can file your schedule C, pay taxes on your $200 and go by the books, or pocket the money. Either way, the IRS is NOT chasing these types of people down!!!

Its BASEBALL CARDS. Have some freaking fun with it and if you make $3,000 profit, awesome. File your schedule C on that 3k as a sole p and nobody is gonna come knocking.

P.S. You CAN deduct expenses/cost as a sole P. I think someone above asked about that. For example, if you pay $90 for a card and sell it for $100, you only pay tax on the $10 profit. Your $90 is considered an investment in inventory (don't know the exact terminology).

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Old 04-21-2011, 02:29 PM   #41 (permalink)
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I do contract work for my county part time in addition to my full time job, so I am required to file Schedule C as a Sole P for that work. It takes 2 seconds to file and I'm done. Gross wage - business expenses = Net Pay which is then taxed. Pay my taxes and done. The taxing, liabilities, regulations etc. are nothing if you are making a few thousand extra cash as a contractor. The IRS is not chasing these people down. If I was making 75k as a contractor then yes there might be a different story.

You people continue to make it sound like it's a burden to be in business for yourself. Don't discourage the American dream. There are more Sole P's in this country than you realize. Technically, if you fix your neighbor's car and he pays you $200, you are a sole proprietor. You can file your schedule C, pay taxes on your $200 and go by the books, or pocket the money. Either way, the IRS is NOT chasing these types of people down!!!

Its BASEBALL CARDS. Have some freaking fun with it and if you make $3,000 profit, awesome. File your schedule C on that 3k as a sole p and nobody is gonna come knocking.

P.S. You CAN deduct expenses/cost as a sole P. I think someone above asked about that. For example, if you pay $90 for a card and sell it for $100, you only pay tax on the $10 profit. Your $90 is considered an investment in inventory (don't know the exact terminology).
Really like your points...

As far as deducting expenses, none of that will be an issue because I track everything in my database, which will be extremely helpful.
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Old 04-21-2011, 03:39 PM   #42 (permalink)
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I dont do contract work But i did own a Card shop,Still own a Collectible Car business.
So speaking from BAD Experience and BAD advice from lawyers and CPA(which i sold partial ownership of my card shop too).

STAY A HOBBY AS LONG AS YOU CAN ,then if you really need to go "business" go directly into a LLC.

What people are posting is general knowledge, what they are not posting is other variables as G.E laws(general excise tax), income tax fed/state, insurance, irs, paypal filing which i doubt your lawyer knows about, CHANGING LAWS, regulation as a business versus person hobby,etc.etc.)

Once you go "BUSINESS" you will be fcked with regulations,licenses,taxes,etc.... Businesses are held to higher standards versus personal hobby transactions.

To the OP Listen to the "professors",CPA,Lawyers if you want. I would advise you to speak to an ACTUAL SMALL BUSINESS OWNER because that is the only person that deals with ALL THE ABOVE everyday and learned by DOING.

fly under the radar for now. the benefits of a Business isnt so good now that Topps an UD are favoring the B&M with changing policies(which both your CPA and Lawyer doesnt know).


But, hey ,what do i know. I just looking at real estate sector now. Back to a Hobby with cards.


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I do contract work for my county part time in addition to my full time job, so I am required to file Schedule C as a Sole P for that work. It takes 2 seconds to file and I'm done. Gross wage - business expenses = Net Pay which is then taxed. Pay my taxes and done. The taxing, liabilities, regulations etc. are nothing if you are making a few thousand extra cash as a contractor. The IRS is not chasing these people down. If I was making 75k as a contractor then yes there might be a different story.

You people continue to make it sound like it's a burden to be in business for yourself. Don't discourage the American dream. There are more Sole P's in this country than you realize. Technically, if you fix your neighbor's car and he pays you $200, you are a sole proprietor. You can file your schedule C, pay taxes on your $200 and go by the books, or pocket the money. Either way, the IRS is NOT chasing these types of people down!!!

Its BASEBALL CARDS. Have some freaking fun with it and if you make $3,000 profit, awesome. File your schedule C on that 3k as a sole p and nobody is gonna come knocking.

P.S. You CAN deduct expenses/cost as a sole P. I think someone above asked about that. For example, if you pay $90 for a card and sell it for $100, you only pay tax on the $10 profit. Your $90 is considered an investment in inventory (don't know the exact terminology).

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Old 04-21-2011, 03:55 PM   #43 (permalink)
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I registered as a sole proprietor last October. I got my business license, a DBA, a state resale certificate, and some sort of other required permit required by my city to operate a business from home.

I did this in reaction to Paypal's new reporting system that went into effect this year. If you do over $20k in paypal transactions, Paypal (and the IRS) are going to treat you as a business and not a hobby, so you might as well get legit.

I considered an LLC and talked to a few business lawyers I know and a few small business owners. They all laughed when I brought up forming an LLC for an ebay baseball card business. Take that for what it's worth.

I have kept perfect records of all of my expenses and gross receipts, so if the IRS wants to audit me I should be able to produce the evidence required to defend myself.
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Old 04-21-2011, 04:07 PM   #44 (permalink)
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-And i talk to small business owners every day that commit federal violations of the tax code because they didn't talk to cpa's or attorneys before they started their business, they jsut listened to other business owners in their industry. That led to liability, and in at least two cases having their business license pulled by not heeding the advice of the professionals.

Everyone can cite examples on both sides of incompetent business owners, cpa's, and attorneys. it happens. they key is to make up your own mind and carve your own path out, but to do so appropriately you need all the info. talk to other business owners, talk to cpa's, and talk to attorneys. then make up your own mind. For anyone to flat-out say attorneys or cpa's don't know what they are doing, or that small business owners are the only ones to listen to, is just naive and quite frankly reckless.

And as for the passive comments that cpas and attorneys some how do not know how to run businesses because they don't "deal with ALL the above everyday"...

well that's just dumb...

what do you think law firms and cpa firms are, charitable organizations? no, they are businesses, large and small, that make money just as legitimately and legally as others. to suggest otherwise is naive and just untrue.

lobo_hacker, hoping this doesn't get out of hand
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Old 04-21-2011, 04:14 PM   #45 (permalink)
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Exactly, the average NON collector laughs at "baseball" Cards. Then you show them that Cards on ebay are selling for $10,000 + for ONE card, they go WTF???? Pokemon was doing $50,000 Gross weekly in 1999. POKEMON cards from a 200 sq ft shop , People laugh, but a CPA ended up buying majority interest and running the shop (he was a customer and was amazed at the volume of cash changing hands hourly). Most Non-Collectors havent a clue as to how much money is in "cards". I think the average non-collectors think cards sell for $0.10 and are worthless, so they laugh. Try showing a BGS 10 Jordan rc to those lawyer friends/business owners and ask them if the would pay $500, they would laugh, then you can say they just lost out on a $10,000 - $20,000 profit. Then they will start asking YOU questions.

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.....I considered an LLC and talked to a few business lawyers I know and a few small business owners. They all laughed when I brought up forming an LLC for an ebay baseball card business. Take that for what it's worth.
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Old 04-21-2011, 04:26 PM   #46 (permalink)
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I will give you a good example. A successful Dentist friend of mine makes $$$$$$$$$$$$, BUT, he has a contract with a company that actually RUNS THE BUSINESS by scheduling,collections,staffing the office for a huge percentage of the gross reciepts. ALL my dentist friend wants to do is HIS JOB, he wants NOTHING TO DO with running the business. HE Wants to work 3 days a week and go fishing on sundays, NOTHING WITH COLLECTIONS, appointment scheduling,books,etc. Most Successful Lawyers or Service oriented businesses have a specific skill. Running a business is very time consuming so the actual business tasks are done by everyone EXCEPT THE NAME ON THE DOOR(owner). I do have a service oriented business also. I do none of the daily accounting, tax calculations,etc.
My businesses are LLC or Non-Profit status. None are sole P. No mater how small the business is, LLC or Non-Profit ORg.
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And as for the passive comments that cpas and attorneys some how do not know how to run businesses because they don't "deal with ALL the above everyday"...

well that's just dumb...

what do you think law firms and cpa firms are, charitable organizations? no, they are businesses, large and small, that make money just as legitimately and legally as others. to suggest otherwise is naive and just untrue.

lobo_hacker, hoping this doesn't get out of hand
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Old 04-21-2011, 04:26 PM   #47 (permalink)
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I registered as a sole proprietor last October. I got my business license, a DBA, a state resale certificate, and some sort of other required permit required by my city to operate a business from home.

I did this in reaction to Paypal's new reporting system that went into effect this year. If you do over $20k in paypal transactions, Paypal (and the IRS) are going to treat you as a business and not a hobby, so you might as well get legit.

I considered an LLC and talked to a few business lawyers I know and a few small business owners. They all laughed when I brought up forming an LLC for an ebay baseball card business. Take that for what it's worth.

I have kept perfect records of all of my expenses and gross receipts, so if the IRS wants to audit me I should be able to produce the evidence required to defend myself.
Thank you for this reply. I think this is exactly what I'm going to do, especially due to the new Paypal reporting changes this year. Just not worth taking that chance.

My question is...I've already done quite a bit of sales from the beginning of this year until now (high end cards), so if I apply for a business license and resell license as well as become a sole p., will everything still be viewed as 'retroactive' in the eyes of the IRS? In essence, will I not be in trouble despite the fact I did close to 15k in sales to start off the year BEFORE I filed for all these licenses?


Great thread, appreciate all the info!
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Old 04-21-2011, 05:08 PM   #48 (permalink)
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Been thinking.
My advice. Get the RIGHT lawyer and the Right CPA. Not all cpa/lawyers are the same!!!!!!!!!!!!!!!!
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Old 04-21-2011, 05:21 PM   #49 (permalink)
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I filed a DBA (Doing Business AS) with the County after I filed my paperwork with the State. The LLC really is only needed if you feel that you will be sued. Doing Card sales i dont think its really worth it. Now if you get to the point your doing 6 figure profits, then yeah, I'd look into it.

At the end of the year I file my business taxes showing my books and as far as I know I'm doing everything required. I've yet to sell enough to worry about quarterly taxes, but if (or hopefully once) that happens, then I'll start doing that.
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Old 04-21-2011, 05:44 PM   #50 (permalink)
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Thank you for this reply. I think this is exactly what I'm going to do, especially due to the new Paypal reporting changes this year. Just not worth taking that chance.

My question is...I've already done quite a bit of sales from the beginning of this year until now (high end cards), so if I apply for a business license and resell license as well as become a sole p., will everything still be viewed as 'retroactive' in the eyes of the IRS? In essence, will I not be in trouble despite the fact I did close to 15k in sales to start off the year BEFORE I filed for all these licenses?

Great thread, appreciate all the info!
Pay taxes on everything. You are supposed to do this whether you were "legit" or not.

Sorry if I'm misunderstanding your question.
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