Wondering...

This change is surely benefiting noone more then those that generate income via GOM. Since you got a huge income boost from your friends at Linden Labs are you all going to do the right thing and report this free untaxed income to Uncle Sam? Tax day approaches. Would this be considered gambling winnings since it's a game? Damn they'd tax the heck out of it if so. I'm sure GOM keeps good records of whats sold and purchased. Better beware big brother may come take a peek

This has been answered before.

If you have registered your business with the Feds, you follow Tax rules regarding small business.

If you consider this a hobby, you follow Tax rules regarding hobies.

I believe the threshold is $600/year, but that could be wrong.

Yea but isn't it $600 for the year consisting of all your income? I know each year on our taxes even the piddly interest we make on a couple savings accounts that don't = 600 a year together we have to report. All the money sellers got themselvs a nice pay raise from Linden Labs the other day. Hell I'm sure some make more then 600 a year from it. I look at the top 10 lists and drool. That's a lot of free real money sitting in those fat Linden accounts.

Those that support this drastic stripend cut (and yes it is drastic because there was no way to replace the income) spoiled a great deal of what I see as fun in SL. Why should they get a free ride. They want their Linden money to sell for more they should have to pay their dues and lose something as well. The tax man is coming for you.

Eithics questions aside, anyone would be insane not to report their SL earnings. Here's why. If you declare SL as your business, you are then entitled to all the tax deductions afforded to business owners. That means you can write off your land tier fees, your related software purchases such as Photoshop & Poser, depretiation on your computer itself, a portion of your rent or motgage to cover the room (home office) where your computer is located, your entire broadband cost, any and all office supplies you buy such as CDR's, paperclips, pens, pencils, paper, etc., portions of restaurant meals (entertainment expenses). Even vactaions can be written off as business expenses (just mention your SL business to people you meet and the trip is now legally considered a business trip). The list goes on and on.

By the time you're done, it shouldn't be hard to declare significant losses from your SL business. That can serve to gratly lower your taxable income on paper, and that can save you hundreds, even thousands come April.

I've been a business owner for 11 years now, and I can promise you you'd be doing yourself a tremendous disservice not to declare your SL business. A very wise person said the following to me when I first began in business:

"There is a big difference between tax evasion and tax avoidance. Tax evasion is not reporting your full income. That's bad. That's illegal. That's what they busted Al Capone for. Tax avoidance on the other hand is good. Tax avoidance means simply taking advantage of your constitutional right to pay as little in taxes as possible. Agressive deductions!"


EDIT: Oh, and Corey, the $600 is not for all your income. It's for each individual source. If you are paid less than $600 by an employer for the year, the government defines that as casual labor, which is untaxable. For your SL business you are self employed and the first $600 of any self employment income is always untaxable as well.