Failure to report SL Income to IRS

OK - those of you making a profit in SL have to declare it.

It must follow that those of who don't can declare a loss and get it offset against any tax we pay already.

Even those of us who aren't even trying to.

/me searches his transaction history and reaches for a tax return form.

Hrm.

Totally un-SL related, but I'mma have to discuss this. My Aunt doesnt/wont work, but she knits all the time to sell 'em. It isn't much of an expense or profit, but anything would rock for them. They are so below poverty.

As for SL profit? Hopefully someday I'll make a cent! =D

the reason they were audited was probably because they were messing up on their taxes and the I.R.S. spotted some red flag or cheat..
lying on your taxes will bring charges..from dealing with agent all the time when i have questions i've gotten to know a few..they can audit anyone at any time..it's just not in it for them to go after someone lying to get a couple hundred more than it is a thousands more..

i think the ones you are talking about are the ones on the edge of getting EIC or not by a few digits on their forms. they won't get money from the poor but they will break someone just above the line of poverty..

the bottom line is .any income in the year is taxable..
longterm investments or tax shelters hold off being taxed on because it is not a liquid asset..
soon as it is liquid it can be taxed because it has become usable income in that year..anything with a record of earnings can be seen..

sl is just like a tax shelter and keeps the money hidden from being taxed until it is turned to rl money..unless you invest into another tax shelter of some kind within the same year or any time limits given.
this is why there are penaltys if you draw on stocks and bonds before they mature.

So what is made in SL ...stays in SL....lol

unless they try to make lindens taxable ..
i heard they were going to try that a while back but have not heard of it since..

I've learned a long time ago not to try to dispense tax or business advice - invariably people will copy what you say not realising their situation is different - or misread it or whatever. And ultimately, turn around and blame you for helping. So I don't, other than to say: see a tax professional. Nuff said.

* * * * *

The really big question, for those of us who do report, is: are taxes going to be raised in 2009?

If so it makes sense to bring in income in 2008, as much as you dare without tipping over the applecart, and report it before 2009.

Watching the US government and their 'bail out' plans these days, well, gee.

I don't need a tax expert to tell me all that bailout money has to come from somewhere. And nobody will be trying to get elected next year. Hmm... so why, exactly, would taxes stay at current levels?

I'm probably not the only one thinking about this, either.

I pay taxes in sense any time I order pizza, cigarettes, pay my phone, cable or electric bill.
Yet my yearly income is exempt at this point.
And in SL I am lucky if I make 40 dollars a year. Nothing I make ever goes out of SL.
I know I am not the only one who is in same boat here.
There is several of us I have met who are content makers, very talented and we rarely
make enough to even cover our internet services if we did cash out.
There other things I get to stress out over.
I don't make enough to even cover tier if I needed too.

Sorry, I just realized my post was unclear.

I was speaking strictly about business owners seeking consumer credit in the US.

I have no information on business loans.

But I still see the self-employed being declined for credit due to lack of income when they run all their expenses through the business. It works like this: Joe's Chop Shop absorbs all of Joe's costs against the gross revenue. Joe's Chop Shop now has a very low net income. Joe doesn't pay himself a salary - he just takes money as he needs it. He declares whatever isn't expensed through the business as his personal income, but on a consumer credit application there is no way to indicate how much of your living expenses are paid through the business.

If Joe could show a net income for the business AFTER taking a salary for himself, he'd be fine. But as it is, he's showing a personal income that may be less than the guy who washes the dishes.

This is what I've learned both from talking to those who expense everything and can't get credit, and those who show a larger percentage of the income as business profit and have no trouble getting loans. It may not be an eternal verity, but it happens on a regular basis.

I wonder if it matters where that income was realized because even though I'm a US citizen with a primary residence in the US if being outside the US when it's realized (converted to USD from L$) and then transferred to me excludes it then I think I may have only been in breach of IRS rules on the $400 limit one year, otherwise I'm sure I'm not the biggest tax cheat in SL but I'm probably big enough to get on their radar.

If they raise taxes it will all end up in court for centuries, providing the nukes, large hadron collider, or the Pod People don't get us first.



They are here.....

the thing that really gets under my skin is that they are corporations we are bailing out..
just companies no different than any other business out there..well there is a difference i guess..they all committed crimes and are getting bailed out by the government lol
they stole so much that our own government has to bail them out or fail..
i believe it is 30 trillion in assets holding up 1 quadrillion of fluff..
i've never heard 1 quadrillion actually used in anything but math before.
the whole thing is just crazyness..