Can the IRS audit me for being a small business owner and not paying any taxes on the money I make?

[Anonymous]

I create custom stickers as a side thing and it pays pretty well for me. I could make $100-$200 in a day but usually $60 per day doing this.

I do not pay taxes at all on this hobby because it would kill my profit to the point where I wouldn’t be able to make affordable stickers and would lose my customers. They’d go to other small businesses to have their stickers made.
I only ever make small deposits into my bank account every now and then. Nothing insane like $1,000 or anything like that. I always stay having under $1,000 in my bank account. I’m not rich by no means. I have stuff to pay.

[jshm2]

Depends on your annual profits and costs.

It's always better to calculate it yourself, rather than leave the IRA to do so - and fine you for it.

Get a spreadsheet - there are plenty of free templates online - and cost it yourself. If you're far over the limits then don't risk it, pay up.

[SomeJokeTeeth]

Are you a registered small business or just selling on Etsy or something?

[Asker]

I’m not registered at all. Selling on instagram and Facebook.

[SomeJokeTeeth]

You should be fine then, they only really care about registered businesses not reporting earnings; coming after you would be like coming after people that sell their stuff on eBay

[Asker]

Yeah, I’d figure because I’m also pretty poor. I am only getting by. I can’t afford to do this the right way at the moment.

[SomeJokeTeeth]

When you can then of course register, but for now you're good

[WindAtMyBack]

They can audit you for almost anything, including random audits. But I think what you are concerned about is not really an audit.

There is a very large "under the table" economy in the US. I worked in residential construction for years. A large portion of construction is under the table. It wouldn't surprise me if the majority of houses in the US have been built using at least some under the table labor. The IRS has been trying to crack down on it for decades, with little success. I've done a lot of other things under the table also.

The idea is to not get caught. Nobody is going to 1099 you, especially since they won't have your SS. But that doesn't mean you can't get caught. If your numbers get bigger, then you have more to worry about. Use cash for food and other stuff.

I used to have a few thousand a week going in and out of the bank without any problem. I think the rules have changed since then though.

[Anonymous]

There was a huge law change that took effect recently where the IRS now wants taxes from "the smaller" business owners and people who sell on the likes of Etsy/Poshmark, etc. who previously did not have to pay taxes for their small sales.

Essentially any self-employment income over $400 will result in you needing to pay self-employment tax.

Granted, the IRS tends to go after bigger fish to fry because after all, even if you owe back taxes, how much are they really going to get from you, right, but why live in that fear if you don't have to if you need to pay taxes because the last thing you want to do is then owe a bunch of taxes, which you then can't pay if they do decide to audit you.

[SaoirseS]

Short answer, yes they can. ANY income you make is taxable, with few exceptions, but since you're making and selling goods you aren't in the exception category. Will they come after you for an audit? Probably not since you're operating under the radar and aren't making that much money.

[Avicenna]

I'm going to assume you're a US taxpayer.

It used to be that a hobby wasn't taxed, but those days are long gone. You have to pay taxes on hobby income (including income and Social Security/Medicare taxes) and can't deduct hobby expenses. If you're trying to make a profit, you're a business and can deduct your expenses.

Please note that this is not tax or legal advice.

[DarkWinterNights]

Unfortunately yes, you’re the reason the IRS hired 87k new agents. They don’t need them for big businesses and they need to increase tax collection to attempt to offset the massive Inflation Reduction bill that just passed.
They can’t look into your bank account without a warrant though, so unless they have some reason to suspect you, you probably won’t be targeted. Just don’t get caught. You aren’t rich enough to afford the kind of lawyer you would need.

[Sixgunsound]

That is more or less what they exist for. Larger companies can afford to bribe members of government to point the IRS at smaller companies even though auditing larger companies would get more money back for the government.

[Anonymous]

Yeah but given the democrat political regime are pushing fo communism are currently up to banning -All businesses their government doesn't own
-Cash
-Any investments or pensions
-Vehicles
-Art
-Fine wine and whisky
-Stocks, shares and bonds
-Real estate and other land-based holdings
-Gold, silver and other valuable metals plus diamonds and gemstones

[exitseven]

If you are incorporated of have a C-corp you are in their crosshairs. If you are just dealing in small cash transactions you should be flying below their radar.

[captain_voidwalker]

Not just on money you make , they can audit any business expenses, and investments you have. The government hates it when people are happy so be prepared to get pounded by the irs.

[MiseriaCantareAFI]

IRS is more likely to go after large corporations now that a dem. is in charge. But, if you're not paying your taxes, they could always come after you, too. And why shouldn't they

[Kreneman]

Yes they can and I would not take any risk especially if it's legal in the U. S.

[OddBeMe]

Seems like you know…

Yes they can. But will they? They usually go after millionaires. But i’d just file and pay.

[maximumpower]

Ask them, not a bunch of anonymous drones on GAG...

[driven159]

You just told on yourself to the IRS you better hope they are not watching this

[Anonymous]

Of course they can, and they will.

[saffoler]

Yes.

[Pterodon]

Definitely