Yes a LLC is a better option now, but still a pain in the ass for the avg person selling online. Your basically forced now to do it that way if you plan to continue selling.
An LLC is a terrible way to go for a comic shop. Way too many reporting requirements. You’re selling comics. There is no need to protect yourself from personal liability for a comic shop, unless you’re retail.
That’s a lot of work for someone who does this as a hobby.
An easy alternative to a hobby is not to start, and operate, a fully functioning business.
You’ve made good points here, I’m just saying that operating your past time like a business kind of defeats the purpose of the past time/hobby, imo. Having said that, I’ve always kept receipts and more or less run my comic hobby as a business, but the Canadian tax laws are very different from the US.
Everyone’s situation is going to differ. My advice, talk to a tax professional. You can provide details on your expected sales, etc and they’ll likely tell you the best route to take that benefits you when paying taxes.
We should probably get this back on topic, you know… talk about modern comics heating up…
Once it’s set up, it’s minimal bookkeeping and paperwork to file taxes once a year, though. Personally, absolutely all of my LLC’s income came through it’s own dedicated bank account, so it is relatively easy to go through and deduct expenses from total income for the year every year.
My primary income in that LLC is actually from drunkwooky.com and wookywiki.com now, though. Ebay sales and income are few and far between really.
I’d encourage people to have the courage to get over the hurdle and do it that way over a sole proprietorship. Is there relatively little personal liability selling comics online? Yes. But the upside protections of an LLC far outweigh the hassle of setting it up. Think about it this way, if you get audited and you’re a sole proprietorship, the IRS has your personal bank accounts, cars, home, retirement accounts, and even your day job’s pay roll at their disposal to come after you for a tax lien. If you’re keeping corporate formalities with your comic book LLC, the IRS has your dedicated comic book LLC bank account available to seize and possibly a long box of worthless to semi-worthwhile modern comics they can collect back taxes with.
If you’re choosing to tax your LLC as a corporation rather than a partnership (admittedly the less popular of the choices), you can also insulate your personal income taxes from the effect LLC income would have on your personal return. Given, that money will be taxed (for a second time) once you disburse it from the LLC to the member (yourself), but it’s an option.
Many opt for the LLC taxes as partnership route because the income only gets taxed once, when at the member level (on your personal tax return). However, if you’re willing to play the long game with your LLC taxed as a corporation, you could place the income in an investment account and hopefully outpace tax by the time you want to take it out.
(Disclaimer: This is all for U.S. taxes. Also, I’m not a tax expert and I don’t know each of your personal situations.)
Yes so basically the government wants you to have a 4 year degree in accounting to sell over $600 on eBay. Amazon wins out they probably lobbied for this, kills their competition from eBay and what not makes them the only place to purchase from online for most goods.
I hear ya. Honestly, the only reason I set up an LLC was when I got a wholesale account to do online action figure retail in 2019. I did like $60,000 in sales that year and I wanted to insulate my wife and newborn from that potentially being a massive financial f#ck up. Spoiler: It was a massive financial f*ck up. Luckily, I rolled that business into my blog which is now moderately successful and my LLC’s financial wounds are almost done being licked.
So, again, if I had just been hobby selling and hadn’t made that jump? Unlikely I ever would have set up an LLC.
That has always bugged me. Taxes are mandatory, and the tax code essentially requires a degree in order to maximize your returns. Meanwhile, I spent 13+ years in public education system, with a curriculum that doesn’t include anything about the tax code. That curriculum is essentially made by the same government that has 13 years to teach about their complex tax code, but chooses not to. I digress.
If you’re selling a couple thousand bucks worth, it’s just going to be income that you add to your return. If it’s a real business, pay for a tax guy and write it off.
Just adjust to a law that should have been in place for years or open a brick and mortar homie. You were supposed to claim your income prior to now, eBay or not, so if you weren’t, being mad that you have to now is really silly.
Because you people apparently can’t follow rules when simply asked to get back on topic, here is the new topic to talk about taxes and such from comic sales.
Next time I’m just going to reach through the interwebs and slap every single one of you all… Three Stooges style…
Ditto.
2022 - Hello Garage Sales, Yard Sales, Flea Markets and Small Conventions. Goodbye any evidence of Electronic fund transfers. Oh well - I’ll adjust. It will be nice not having 13% skimmed off the top
I digress.