I have a question regarding income/taxes

[FortuneForceField 0]

I been djing for ages on sl and been saving up a big amount of Lindens. Now I recently decided that I want to sell my lindens and exchange them for real money.

Obviously all my income comes from tips and salary. I never sold things on the marketplace so I can't consider myself (A business)

 

Does anyone have any clue on what I should report my income for tax purposes?

 

Thank You

[Hintswen Guardian 267]

Anything you earn in SL should be reported for tax purposes. Some accountants only count it when you actually cash out some will count everything, really seems to depend on who does your taxes. 

[Pamela Galli 4,090]

 Only US dollars received and taken out of second life count as taxable income, and there are limits that must be reached before PayPal reports income to the IRS 

[Tari Landar 2,948]

When filing taxes, if you're 65 and under, and single, and you earn at least $10,400USD in a year, you have to file taxes on that income. I don't know at what level Paypal begins notifying the IRS, because I don't use Paypal. I only know the standard 2017 deduction for a single taxpayer plus one dependent(which is what they, seemingly, utilize for this threshold) 

But, I'm not an accountant, I only know some, lmao. So, probably best to look it up. 

[Cilene Inglewood 9]

You will also need to consider if your state or municipality taxes your income. Where I had lived in Pennsylvania - I would pay Federal, state, and local taxes on income. It is best if you check with a professional. Anyone offering you advice about taxes or finances should beware...as that is *highly frowned upon* by the government. Again, consult a professional. Your local library will usually have tax info for you to read or can point you in the direction, locally. It doesn't matter if you consider yourself a business or not...

[Tari Landar 2,948]

27 minutes ago, Cilene Inglewood said:

 Anyone offering you advice about taxes or finances should beware...as that is *highly frowned upon* by the government. 

Uhhh, no, it's not "highly frowned upon" to offer advice...lmao. What's "highly frowned upon", is following bad tax advice-but that's on the person that chooses to follow bad advice, not the one that gives it. 

[Theresa Tennyson 3,594]

11 hours ago, Cilene Inglewood said:

You will also need to consider if your state or municipality taxes your income. Where I had lived in Pennsylvania - I would pay Federal, state, and local taxes on income. It is best if you check with a professional. Anyone offering you advice about taxes or finances should beware...as that is *highly frowned upon* by the government. Again, consult a professional. Your local library will usually have tax info for you to read or can point you in the direction, locally. It doesn't matter if you consider yourself a business or not...

Did you just offer us advice then?

[Chic Aeon 10,532]

Also note that depending on the amount you want to cash out ( it WAS $600 but not sure what it might be currently) you may need to go through a variety of steps to PROVE you are you. And, as I understand it you still need to BUY some Lindens before you can cash out Lindens.  

 

[Cilene Inglewood 9]

@Theresa Tennyson ...advice not to take advice from non tax professionals on the internet - yes. 

[WuShin 86]

Sell your L$ to people in non-taxable countries for dollars 

[Jerilynn Lemon 1,615]

19 minutes ago, WuShin said:

Sell your L$ to people in non-taxable countries for dollars 

I would think the return on the sellers part would be greater, but if they reside in the US, the income MAY still have to be reported to the IRS. And if the sellers return is larger due to selling to a non-taxable country (for dollars US), the liability here in the US would probably result in a larger tax bill.

I'm not a tax expert, so as others have suggested, ask a qualified person in RL, not some SL thread readers.

[WuShin 86]

Just now, Jerilynn Lemon said:

I would think the return on the sellers part would be greater, but if they reside in the US, the income MAY still have to be reported to the IRS. And if the sellers return is larger due to selling to a non-taxable country (for dollars US), the liability here in the US would probably result in a larger tax bill.

I'm not a tax expert, so as others have suggested, ask a qualified person in RL, not some SL thread readers.

Use bitcoin 

 

[Jerilynn Lemon 1,615]

3 minutes ago, WuShin said:

Use bitcoin 

 

That's a can of worms just dying to be let loose thread wise.

Same argument applies when one cashes in. If over a certain amount, it is still considered "taxable income". I think Bitcoins can fall into the category as Lindens, as both are really virtual currency. Not tangible like paper money, coinage, stock certificates etc. They only show on paper and can't be held in your hand.

I stand by my original post.

[WuShin 86]

5 minutes ago, Jerilynn Lemon said:

That's a can of worms just dying to be let loose thread wise.

Same argument applies when one cashes in. If over a certain amount, it is still considered "taxable income". I think Bitcoins can fall into the category as Lindens, as both are really virtual currency. Not tangible like paper money, coinage, stock certificates etc. They only show on paper and can't be held in your hand.

I stand by my original post.

I paid off my house in Bitcoin. I live in a country where I can buy Bitcoin from my bank account, take it our at an ATM, pay all my bills and credit cards with it and I have 3 Visa Debit cards I can load with it in US dollars, Euros or British Pounds Sterling, reason for three currencies is so I don't get ripped off on my local currency when I buy from another country. Bitcoin is not a shady thing, I have my passport, ID and bank account registered. If you keep cards loaded you never need to move it to a bank you just keep it in your bitcoin wallet. 

[Jerilynn Lemon 1,615]

22 minutes ago, Jerilynn Lemon said:

Same argument applies when one cashes in. If over a certain amount, it is still considered "taxable income". I think Bitcoins can fall into the category as Lindens, as both are really virtual currency.

I'm very happy for you. If you are able to negotiate purchases using Bitcoin, more power to you. However, you are missing my point, which I highlighted above. If the real estate agent accepted Bitcoin (or for argument sake, Lindens), that's fine, until they turn and cash out in dollars or pounds or francs, or Euro. It's then a taxable asset. Bitcoin is not recognized as valid currency in any country. Try paying a simple parking fine with it and wonder why the Judge suddenly wishes to speak with you.

If we could somehow get Twinkies to a trade able level, the same could be said. When you cash in those delicious pound cakes with the yummy cream filling, then the resulting conversion becomes TAXABLE as income.

Again, see original post from me.

[WuShin 86]

2 hours ago, Jerilynn Lemon said:

I'm very happy for you. If you are able to negotiate purchases using Bitcoin, more power to you. However, you are missing my point, which I highlighted above. If the real estate agent accepted Bitcoin (or for argument sake, Lindens), that's fine, until they turn and cash out in dollars or pounds or francs, or Euro. It's then a taxable asset. Bitcoin is not recognized as valid currency in any country. Try paying a simple parking fine with it and wonder why the Judge suddenly wishes to speak with you.

If we could somehow get Twinkies to a trade able level, the same could be said. When you cash in those delicious pound cakes with the yummy cream filling, then the resulting conversion becomes TAXABLE as income.

Again, see original post from me.

Understood