If you are in the business of buying and selling coins - the purcahse of a coin would be a purchase of inventory. For tax purposes inventory isn't deductable until sold. Beginning inventory plus purchases less ending inventory eqaual cost of goods sold. As for sales and use tax - pruchase for resale have no sales or use tax charged on the transaction.
I think you are making too big a deal of this. If you expect to make $500 this year, you don't need to do anything special with regards to taxes. No quarterly payments, no tax number, no worries.
Still...he does have a normal job so he is earning enough money that he is required to pay taxes. Even a $500 profit here selling supplies is considered taxable income in addition to what he makes at his normal job. I wouldn't offer advice to not pay taxes...even if the amount is so little.
Tim, I believe you know that if a supplier requests a resale number, as is often the case, it is needed, and that the quarterly tax payment requirement is income dependent. I'm impressed with the patience/knowledge of site members, and how your posts indicate that your questions are often rhetorical, yet receiving in-depth responses. You really needn't have any additional documents, or pay advance taxes in order to sell. The option is yours to choose appropriately to your priorities. I believe most of us who've been successful wouldn't opt for the morass that you appear to elect, with disregard for sincere guidance. I believe if you call 1-800-829-1040 (1-800-TAX-FORM), request the receipt of Publication 17, and digest same, you will receive sufficient answers for the majority of your elementary questions. If a rant is your primary goal, the IRS and State tax collectors are very accepting of same when received with an annual tax payment. I submit a polite "rant letter" annually, to both federal and state jurisdictions, with LARGE PAYMENTS, and a request for a penalty billing, if any is due. I've never received a response, other than occasionally an anonymous overpayment refund, which I've appreciatively received. I believe I speak for the majority in stating that we welcome objective queries, but suggest directing rants to appropriate agencies or representatives. You may even become a subject of a future presidential speech for correction of injustices in tax policies for the unfortunate.. JMHO )and that, and
Do you want to own a business, so you can tell people that you own a business and you have the paperwork to prove it, or do you want to buy and sell coins and coin supplies and make money, and eventually grow into a real business? Going to coin shows, and selling a couple hundred dollars of coin supplies a week, does not justify getting a business license, state tax id numbers, etc. A simple DBA checking account is more than enough to get you going. If or when you grow your enterprise you may consider setting up an LLC, however I think your putting the cart in front of the horse.
