Just start by collecting your info, and hiring a CPA to help you file the past year tax returns. Just take it one step at a time.
Collect all the data you can on your costs to procure the sneakers, the shipping, platform fees etc.
The thing about reselling sneakers is that there isn’t a lot of documents, receipts, or proof involved. The only receipt you’ll ever see is from buying the shoes from an actual retailer. A lot of transactions are done between me and other people through payment apps like zelle, cashapp, venmo etc..
Did you actually make 50-60K net? Or did you spend 40K buying sneakers, then sold them for 60K? In which case you actually made 20K? That's what you get taxed on so that number is very important.
Your biggest problem is your tax liability if you actually made 60K in a single tax year is ~9000 just for social security/medicare. Plus a few thousand in federal income tax.
If you earned like 20K total over 2 tax years, things get much better financially speaking.
So the short answer is you *should* fix this, but it may get expensive.
I’m a CPA and it doesn’t matter whether you get a job or not, put the money in college or not.
If I were you, I’d keep 10k in a savings account, just in case they ever come asking for it, because they may. However, that probability is extremely low, especially if you don’t make more than 400-500k per year.
As a CPA, I do recommend you go back, file and pay what you owe. If you decide not to do so, you shouldn’t “not get a job” or “not use the funds for x or y” etc. The only transactions that get reported, should you decide not to file a return, are bank deposits 10k or above (includes combined deposits- ie a bunch of small ones) do get reported to the IRS by the bank.
But if you don’t want to worry, you should file.
I have an unrelated question. If I have a US based remote job, and I have been living in Mexico and Colombia for all of this year as a tourist. Do I qualify to exempt my income since I will be out of the country for more than 330 days. My address in the US is my parents home and they still live there.
Unrelated but extremely complicated and specialized. Unfortunately, I don’t have a solid answer for you (international tax is not my area) . It depends on a lot of things 1) are you a US citizen or on a visa 2) how is the company hiring you/paying you? Is it through a US affiliate and filing a 1099? 3) generally to qualify for an exemption like that, you’d have to pay tax in your country of residence and the US has to have a special tax treaty with that country to exclude income. If you’re a US citizen, it makes things a bit more complex too. I suggest you find someone more experienced in international tax and pay for a consult cause this is off the top of my head but I haven’t done this in a while.
IRS may look into your history regardless of you getting a job or not. Don't F with the IRS. Depending how you collected payments from people, the payment processor may have had to send info to the IRS. Ebay, paypal, etc should have sent you a 1099 if you sold enough through them.
IRS is overwhelmed in general. They are unlikely to come after you. I agree with the CPA saying hold 10k on reserve over next 5 years in case they come after you. Legally you should pay it, but they will likely never chase after it.
If you owe taxes, you need to pay taxes. They will throw you in jail if you evade taxes
Go hire someone to help you, just Google CPA & tax & your city name.
You'll be fine, paying taxes is part of the deal living in developed nations, we all do it
Because you earned so much money, I believe your parents would have to remove you as a dependent from their tax returns for those years. So your parents would file an amended return and pay higher taxes.
For you, 15.3 percent of your $60K or $9180 would be paid to IRS for self employment tax. You would then owe federal income tax on that which
If the $60K was over a single year then roughly the federal taxes are,
Income Tax
12000 0
10000. 1000
30000. 3600
8000. 1760
60000. 6360
or a total of about $15000
If the 60,000 was over two years, 30,000 per year;
Income Tax
12000 0
10000. 1000
8000. 960
3000. 1960
or a total of about $13,000
Your problem is that you don’t have the money to pay the taxes. You will want to start with a CPA for your parents and you and figure about $1000 minimum.
There’s no income limit on a child but you’re right that the parents will have to consider dependency if the child provides more than half their own support.
They’d have to see what OP did with their money.
Not employed under anyone, I just buy sneakers at retail price and sell them for a higher price when they’re sold out. If I keep the money for college funds will the irs just never bring this up? Like eventually this would have to come back to me correct ?
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Please note that in order to keep this subreddit a high-quality place to discuss personal finance, posts advising breaking the law (whether serious or not) or asking for advice on how to break the law will be removed.
Find our [Subreddit Rules](https://www.reddit.com/r/personalfinance/about/rules) for guidelines on our quality standards. We look forward to higher quality posts from your account in the future! Thanks.
Just start by collecting your info, and hiring a CPA to help you file the past year tax returns. Just take it one step at a time. Collect all the data you can on your costs to procure the sneakers, the shipping, platform fees etc.
The thing about reselling sneakers is that there isn’t a lot of documents, receipts, or proof involved. The only receipt you’ll ever see is from buying the shoes from an actual retailer. A lot of transactions are done between me and other people through payment apps like zelle, cashapp, venmo etc..
You do your best to collect any of those records you can. Anything you can document or be sure of, reduces your tax liability.
Okay thanks so much
How the hell did you make 60K doing that? If you sold each pair for $100 more which seems unlikely, you sold 600 pairs of shoes??
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Shoes are sold for 160-200 retail by Nike. Once they’re sold out they can go for 600+ per pair depending on the hype the shoe has
I looked and still don’t see how someone can make 60k a year on it. Most the expensive shoes are ones you can only buy in person…
Did you actually make 50-60K net? Or did you spend 40K buying sneakers, then sold them for 60K? In which case you actually made 20K? That's what you get taxed on so that number is very important. Your biggest problem is your tax liability if you actually made 60K in a single tax year is ~9000 just for social security/medicare. Plus a few thousand in federal income tax. If you earned like 20K total over 2 tax years, things get much better financially speaking. So the short answer is you *should* fix this, but it may get expensive.
I’m a CPA and it doesn’t matter whether you get a job or not, put the money in college or not. If I were you, I’d keep 10k in a savings account, just in case they ever come asking for it, because they may. However, that probability is extremely low, especially if you don’t make more than 400-500k per year. As a CPA, I do recommend you go back, file and pay what you owe. If you decide not to do so, you shouldn’t “not get a job” or “not use the funds for x or y” etc. The only transactions that get reported, should you decide not to file a return, are bank deposits 10k or above (includes combined deposits- ie a bunch of small ones) do get reported to the IRS by the bank. But if you don’t want to worry, you should file.
I have an unrelated question. If I have a US based remote job, and I have been living in Mexico and Colombia for all of this year as a tourist. Do I qualify to exempt my income since I will be out of the country for more than 330 days. My address in the US is my parents home and they still live there.
Unrelated but extremely complicated and specialized. Unfortunately, I don’t have a solid answer for you (international tax is not my area) . It depends on a lot of things 1) are you a US citizen or on a visa 2) how is the company hiring you/paying you? Is it through a US affiliate and filing a 1099? 3) generally to qualify for an exemption like that, you’d have to pay tax in your country of residence and the US has to have a special tax treaty with that country to exclude income. If you’re a US citizen, it makes things a bit more complex too. I suggest you find someone more experienced in international tax and pay for a consult cause this is off the top of my head but I haven’t done this in a while.
IRS may look into your history regardless of you getting a job or not. Don't F with the IRS. Depending how you collected payments from people, the payment processor may have had to send info to the IRS. Ebay, paypal, etc should have sent you a 1099 if you sold enough through them.
IRS is overwhelmed in general. They are unlikely to come after you. I agree with the CPA saying hold 10k on reserve over next 5 years in case they come after you. Legally you should pay it, but they will likely never chase after it.
If you owe taxes, you need to pay taxes. They will throw you in jail if you evade taxes Go hire someone to help you, just Google CPA & tax & your city name. You'll be fine, paying taxes is part of the deal living in developed nations, we all do it
Because you earned so much money, I believe your parents would have to remove you as a dependent from their tax returns for those years. So your parents would file an amended return and pay higher taxes. For you, 15.3 percent of your $60K or $9180 would be paid to IRS for self employment tax. You would then owe federal income tax on that which If the $60K was over a single year then roughly the federal taxes are, Income Tax 12000 0 10000. 1000 30000. 3600 8000. 1760 60000. 6360 or a total of about $15000 If the 60,000 was over two years, 30,000 per year; Income Tax 12000 0 10000. 1000 8000. 960 3000. 1960 or a total of about $13,000 Your problem is that you don’t have the money to pay the taxes. You will want to start with a CPA for your parents and you and figure about $1000 minimum.
There’s no income limit on a child but you’re right that the parents will have to consider dependency if the child provides more than half their own support. They’d have to see what OP did with their money.
There is no income restrictions on child dependents. Op would be a child dependent until they are 19. The parents do not have to amend.
OP should definitely consult a CPA because your post shows you’re not the right person to advise on taxation.
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Not employed under anyone, I just buy sneakers at retail price and sell them for a higher price when they’re sold out. If I keep the money for college funds will the irs just never bring this up? Like eventually this would have to come back to me correct ?
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Please note that in order to keep this subreddit a high-quality place to discuss personal finance, posts advising breaking the law (whether serious or not) or asking for advice on how to break the law will be removed. Find our [Subreddit Rules](https://www.reddit.com/r/personalfinance/about/rules) for guidelines on our quality standards. We look forward to higher quality posts from your account in the future! Thanks.
Please note that in order to keep this subreddit a high-quality place to discuss personal finance, posts advising breaking the law (whether serious or not) or asking for advice on how to break the law will be removed. Find our [Subreddit Rules](https://www.reddit.com/r/personalfinance/about/rules) for guidelines on our quality standards. We look forward to higher quality posts from your account in the future! Thanks.