Today has officially been a year since I started dealing in coins. I remember selling 5 slabbed coins for a total of $55, and while I don't remember what I sold, I do remember who I sold it to. I've went from coin roll hunting primarily to mostly dealing in common stuff to slabbed coins to silver or gold, the 3rd I try to do often. My bucket list for the new coin dealing year: get a 1921-D half dollar, finally! That sentence makes me want to buy that coin. Somebody help me before $300 goes out the window!
Though I can't offer you any help, I do wish you Congratulations on your anniversary and hope for continued success for your business!!!
Congratulations. Hope you do well. Something you might want to think about. This would be a good time to start keeping good records on everything you buy and sell. It's an important part of being a dealer. Excel is easy or even a simple paper ledger will work. As your business grows, you will need something in place to keep track of everything. I made the mistake of waiting too long. It was tough to get caught up. Just a thought.
I could say the same for us collectors: trying to catch up on your inventory years or decades after the fact is very, very difficult!
Thank you! I hope that my opeartion will continue, since I really see it as good practice to at least have recurring interest in coins, which is one thing I have. I really need to start doing that. I've gotten to where I will write a code on the back of the flip (such as for a Lincoln cent I paid $2 for, it'd be LC-2-1 with changing numbers, and so forth.) That is a great tool for coin shows from my experience, as I always try and write down my profits from it. I fly under the radar. Maybe they can get me if the operation becomes better-known. Sad part about that is that if I have to start paying taxes on the gains when I am 18, which will be in a little over 2 years, I may not be able to fly under the radar again. That's the day I will fly a little lower.
@The Half Dime . I did not know of your age. We all have to make choices in life and some are far from black and white. Due to a group of family problems I had to go to work at an early age. I started at 15 even though that was against certain laws at the time, but one of the smartest things I did do was pay my taxes (income & FICA) when I was 16. That action paid huge dividends about 30 some years later when a heriditary condition became problematic. Good luck. James
Since this thread seems to have wandered into a new topic, I'll offer a sometimes useful tip in this regard. To simplify my life, I have enough extra withheld from my paycheck at my full-time job to more than cover the profits I expect to make from the business. Because ToughCOINs is an S-Corp, I need do nothing special to pay company liabilities out of withholding from my ordinary income . . . i.e., company profits are viewed as personal income in my tax preparation. Because I live in NH, and there is no income tax, I only need to pay business profits tax, which is an easy calculation at year end. Not every coin dealer has the luxury of being able to use this approach as not all work another job besides, but following are the benefits I enjoy as a result: No need to compute and hold aside the funds needed to cover the tax bill. Relief from summarizing and filing quarterly, or paying someone else to do so. Relief from stressing over the above 4 times per year . . . just once is enough for someone who has another job. In the nearly 20 years since I started the business, there was only one year when my withholdings fell short of my total tax liability (FTJ and ToughCOINS combined). Compensating for that shortfall was uncomfortable, but that solitary issue was easily forgotten until I wrote this post.
My advice is - don't. You will get caught eventually and the consequences are severe. Tax evasion is criminal. I gather that you are not even 16 yet. Running a business means you need to learn to keep good records and pay your taxes. Bad habits are hard to break later.
It's cool you're 16 and collecting/dealing. I'm 32, been a member of CTF since I graduated in 2011 and only JUST started really adding to my collection at the beginning of the New Year.
I hope to start learning about all this coming soon; the real question is, once I start getting my income taxed, I wonder where to check up on the latest information, as I hear that it changes every year. Last year, I heard that if you made over $14,400, you were to report it - sadly, I probably didn't make 1/8 of that last year doing the coins. I would never try to evade taxes intentionally, as I would rather pay what I need to keep 'em off my back. I actually am somewhat under the radar in the coin operation, though, in the matter of being discovered; in this online age, if you're not on eBay or another huge site, you're under a massive radar, which is a mixed thing. I must say, I do have one nearly unbreakable bad habit - not spending the money on coins that were a large amount, such as a few hundred dollars, and rather dealing in the cheaper stuff. I hope to bucket-break that with a 21-D half. Sounds like you've been gathering information over the years! Pretty soon I will be 16, but the weird thing is that I know only one other kid who deals in coins - and he is 14, got started when he inherited his grandparents' coin collection.
You sound like you have a lot to learn yet. I don't blame you but you should try just being a collector for now for a while as opposed to trying to wheel and deal. There's just not enough margins there to make it worth the hassle. Full time dealers go to shows, get fully educated on the market, get to know people, get a proper tax ID so they can get supplies and coins at whole sale and write business expenses off. But you have to get the tax ID to play. Trying to buy coins at retail and flip for a quick profit isn't happening. The margins just aren't there. There's too many costs involved. There's not enough customers in person to not use online resources. Even many online sources don't see enough traffic that you need. The tax issue isn't even close to being an issue for you as the standard deduction for a single person is $14,600 this year. In short, there's no federal income tax due until you go over that amount. Basically if you bought $14,600 worth of inventory this year and turned around and sold it all for $29,250 back, you would be required to pay 10% tax on $50 of taxable income, or $5.00 to the IRS. Your up front expense of 14,600 can't be taxed as it was a business expense and you made 14,650 in profit which would be deducted by your standard deduction, leaving the $50 to pay tax on. Sounds like you're a long way from this point if worried about buying a $300 coin. You haven't made enough for any "flying under the radar" talk.
I will admit, when I go to shows, the profit margins can be a little hard, but I actually do enjoy coin dealing because I can talk to other people while doing it, plus it is quite fun to do. I do have a lot to learn, especially about categories like foreign coins outside of silver and very common pieces, but I feel comfortable with categories such as more common coins, and some certified coins (if I have a CPG with me). I totally get where you're coming from, but I actually do learn a good amount through dealing. I can see what other dealers are selling stuff for, and from there I can see if they're selling anything. Most of my profit is through local auctions, which doesn't say much about what type of coins sell the best, but being worried about a $300 purchase is practically my mindset - I often can't contemplate buying that over a piece of gold. I do thank you for your time, though, as this must've taken a good 30 minutes to type out.
Just wanted to say, everything here is a footprint. If you like talking about your profits go ahead, just understand that the IRS will come after the small guy, on principal alone. everything you type is record, and a reason for the zealous employee to exaggerate your situation. That is not something you want, when just flying under the "Radar".
I really don't like talking too much about profits, and unless someone directly asks me, I won't dare to tell them. I an aware that the taxes will come and I will have to pay them, basically my point is that I don't wanna pay a cent more than I have to while still having fun with coin dealing.
Ha. You're welcome and don't worry. I could do 70 words a minute in highschool... on a type writer. Google it if you have to. lol Typing has always been a strong point of mine. If you're going to sweat a $300 purchase this much than just don't do it. You have a lot of glass ceilings to break yet in that department. $300 won't get you a 0.10th oz AGE now. I'd rather have the 21-D. Though, if you're just going to flip it, why care what you buy? It sounds like you should wait until you have a regular job to supplement this as a side gig until you can go bigger. You have to have the capital to get started. We all can appreciate enthusiasm but you still need to be realistic. It's also probably how most people get their start. For now you oughta be focusing on school.
You just did, look up the Patriot Act. Everything you do electronically is recorded to your own personal file. It's the easiest way to harass $50 bucks from you then compound it when you disagree. And to think that paying taxes is mostly done on a voluntary basis.
Anyways, on with the original subject of the thread, I hope that I could continue to do the dealing, just gotta make sure not to indulge in my greatest coin fear. That's the back of the Numismatist. One thing I ask of you guys is: if you are a dealer, how long have you been doing it? Have you been dealing long enough to reach a milestone?
