Making money off of games by selling gold

[c00face]

There are legit gamers who makes money by selling their gold to players. A lot of developers make this a ban-able offense, but some games do allow it.

 

Usually it's using paypal, and I want to know if you have to report this to the IRS? Lets say you're making $500 a week. Most of the income you get are from "voluntarily" agreement. Not trying to bypass anything or do anything illegal, just want to make sure if players who does this needs to report to the IRS, or doesn't have too.

[plsno]

https://www.irs.gov/businesses/small-businesses-self-employed/what-is-taxable-and-nontaxable-income

 

https://www.irs.gov/businesses/small-businesses-self-employed/tax-consequences-of-virtual-world-transactions

 

[yathis]

32 minutes ago, Supermangik said:

if you have to report this to the IRS?

Any and all income has to be reported.

 

Is it? Fuck no!

 

I read something interesting a day or two ago. The USA is the only country in the world who taxes on citizenship, so if you are making money in China, you are taxed. I never knew that.

 

The one thing you must remember is the government is a big bully, they like to swallow minnows up, but if you are a great shark, they weigh their options on how to proceed. I know with UBS in Switzerland tax haven, they let many richie riches slide, yet they bully the little guy. Just like pigs do.

[c00face]

28 minutes ago, noobadin said:

https://www.irs.gov/businesses/small-businesses-self-employed/what-is-taxable-and-nontaxable-income

 

https://www.irs.gov/businesses/small-businesses-self-employed/tax-consequences-of-virtual-world-transactions

 

Not really understanding the, "If you receive more income from the virtual world than you spend..." And the, "If you spend more in the virtual world than you receive."

[Jito463]

9 minutes ago, Supermangik said:

Not really understanding the, "If you receive more income from the virtual world than you spend..." And the, "If you spend more in the virtual world than you receive."

Basically, it's about net versus gross income.  Net income would be money you made after expenses - expenses, in this case, including the monthly fee to play the game, if there is one.  I believe that any income below $600/yr doesn't have to be reported to the IRS (at least that's what it used to be at one time, but that may well have changed).

 

Of course, as with any advice on the internet, take it with a large grain of salt.

 

[yathis]

Income is Income, so even if you find $20 on the ground, you must report it or else face imprisonment and a fine.

[Andreas Lilja]

2 hours ago, yathis said:

Income is Income, so even if you find $20 on the ground, you must report it or else face imprisonment and a fine.

 

But seriously, our very own Canadian Revenue Agency once stated that even proceeds from illicit drugs or money laundering need to be reported. Income is income.

[Jito463]

6 hours ago, Raskolnikov said:

 

But seriously, our very own Canadian Revenue Agency once stated that even proceeds from illicit drugs or money laundering need to be reported. Income is income.

That's one of the reasons many drug dealers own nightclubs, it's very easy to launder the money made from drug sales.  By reporting on it to the IRS (or your Canadian equivalent) through their "legit" business, they can avoid being caught on tax-evasion charges, like what was used to take down Al Capone.

[dalekphalm]

11 hours ago, Supermangik said:

There are legit gamers who makes money by selling their gold to players. A lot of developers make this a ban-able offense, but some games do allow it.

 

Usually it's using paypal, and I want to know if you have to report this to the IRS? Lets say you're making $500 a week. Most of the income you get are from "voluntarily" agreement. Not trying to bypass anything or do anything illegal, just want to make sure if players who does this needs to report to the IRS, or doesn't have too.

The short answer is any income you make, whether that's from tips, donations, lotto winnings (some exemptions may apply), or income from virtual services - it's all income. You need to report it all.

 

Does everyone do this? No, not necessarily. But you should. Taxes are what keeps modern society working, and what keeps our standard of living high.

 

If you make under a certain amount per year, you'll likely be totally tax exempt (In Canada, it's something like $11,000/year), but I'd advise you to set aside into a savings account a percentage of every "sale", for the purposes of taxes. For the sake of argument, let's assume you live in America and your $500 income per week with no additional income. That's approximately $26,000/year. You would fall into the 15% Federal income tax bracket (It's a graduated bracket, so it's a bit more complicated - you actually pay 10% taxes on the first $9,325 income, and then you pay 15% taxes on the rest).

 

You should also look state and local income taxes, if any apply. Then combine all the percentages up (Let's assume flat 20%). Then every sale, take 20% of that income and drop it into a savings account.

 

That way, when tax time comes, you're not hit with a $3500 tax bill that you can't pay for.

[yathis]

I heard/read that the government is trying to trick people into declaring their non reported income. They said industries that deal in cash, like renovation companies, service indusrty tips, I forget the term they used, I think it was on the radio. Made sense when I heard it. Not to sure how many fell for it. I guess some letters were light pokes, others were more aggressive. Eitherway society in general hates the tax man, and a certain % hate government period.