First State CPAs and Associates

19 hours ago

𝗗𝗼 𝗽𝗮𝘆𝗺𝗲𝗻𝘁 𝗮𝗽𝗽𝘀 𝗿𝗲𝗽𝗼𝗿𝘁 𝗺𝘆 𝗮𝗰𝘁𝘂𝗮𝗹 𝗽𝗿𝗼𝗳𝗶𝘁 𝘁𝗼 𝘁𝗵𝗲 𝗜𝗥𝗦?

Third-party payment apps report your gross transfers to the IRS.

Say you originally bought a couch for $1,200 and later sold it through Cash App for $400.

If you keep the record showing what you originally paid, you can prove that $400 transfer wasn’t a $400 gain. You sold the couch at a loss.

Don't rely only on PayPal, Venmo, Cash App, or whichever payment platform you're using to track things for you.

Keep the records that show what those payments actually represent. ... See MoreSee Less

First State CPAs and Associates

4 days ago

𝗛𝗼𝘄 𝗱𝗼 𝗜 𝗸𝗻𝗼𝘄 𝗶𝗳 𝗺𝘆 𝘀𝗶𝗱𝗲 𝗶𝗻𝗰𝗼𝗺𝗲 𝗶𝘀 𝗰𝗼𝗻𝘀𝗶𝗱𝗲𝗿𝗲𝗱 𝗮 𝗵𝗼𝗯𝗯𝘆 𝗼𝗿 𝗮 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀?

Getting paid via Venmo or PayPal doesn't automatically make your side income a business. The IRS looks at how you operate and whether your primary goal is making a profit.

If you keep separate books, set aside regular work hours, and take on ongoing gigs like freelancing or tutoring, you're operating as a business.

If you're just making money here and there from something you do for fun, like streaming or selling a few crafts, that's usually hobby income. You aren't really trying to make a living off it.

This distinction completely changes your tax setup. Business owners report their earnings on Schedule C and can deduct ordinary expenses to lower what they owe. If your side income is more of a hobby, you report the earnings on Schedule 1 as other income, but you can't write off any expenses against it. ... See MoreSee Less

First State CPAs and Associates

5 days ago

𝗔𝗿𝗲 𝘆𝗼𝘂 𝗮𝗹𝗿𝗲𝗮𝗱𝘆 “𝗺𝗼𝗻𝗲𝘆𝗺𝗮𝘅𝘅𝗶𝗻𝗴” 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗸𝗻𝗼𝘄𝗶𝗻𝗴 𝗶𝘁?

It’s the social media term for getting more value from your money, like cutting expenses or even putting rewards points to use.

𝘞𝘩𝘢𝘵’𝘴 𝘰𝘯𝘦 𝘸𝘢𝘺 𝘺𝘰𝘶’𝘳𝘦 𝘨𝘦𝘵𝘵𝘪𝘯𝘨 𝘮𝘰𝘳𝘦 𝘧𝘳𝘰𝘮 𝘺𝘰𝘶𝘳 𝘮𝘰𝘯𝘦𝘺 𝘳𝘪𝘨𝘩𝘵 𝘯𝘰𝘸? ... See MoreSee Less