I'm thinking about selling some original artwork: when does the government start caring about sales tax and income tax and such?
First - get a professional tax consultation with a NY-licensed CPA or EA. At what point do I need to worry about collecting sales taxes for the city and state of New York? Generally, from the beginning. See here for more information on NYS sales tax.  At what point do I need to worry about record-keeping to report the income on my own taxes? From the beginning. Even before that, since you need the records to calculate the costs of production and expenses. I suggest starting recording everything, as soon as possible. What sort of business structures should I research if I want to   formalize this as less of a hobby and more of a business? You don't have to have a business structure, you can do it as a sole proprietor. If you're doing it for-profit - I suggest treating it as a business, and reporting it on your taxes as a business (Schedule C), so that you could deduct the initial losses. But the tax authorities don't like business that keep losing money, so if you're not expecting any profit in the next 3-4 years - keep it reported as a hobby (Misc income). Talk to a licensed tax professional about the differences in tax treatment and reporting. You will still be taxed on your income, and will still be liable for sales tax, whether you treat it as a hobby or as a business. Official business (for-profit activity) will require additional licenses and fees, hobby (not-for-profit activity) might not. Check with the local authorities (city/county/State). If you sell through an intermediate who sets up the shop for you, odds are they collect and pay the sales tax for you. My experience is with publishing books through Amazon, where they definitely handle this for you. If you can find a retailer that will handle the tax implications, that might be a good reason to use them.  It looks like Etsy uses a different model where you yourself are responsible for the sales tax, which requires you to register with your state (looks like this is the information for New York) and pay the taxes yourself on a regular basis; see this link for a simple guide. If you're doing this, you'll need to keep track of how much tax you owe from your sales each month, quarter, or year (depending on the state laws).  You can usually be a sole proprietor, which is the easiest business structure to set up; if you want to limit your legal liability, or work with a partner, you may want to look into other forms of business structure, but for most craftspeople a sole proprietorship is fine to start out with.  If you do a sole proprietorship, you can probably file the income on a 1040 Schedule C when you do your personal taxes each year.
Lol I'm not even talking about no government (although that's ideal) you're just retarded to think income tax is the ONLY way to fund a government. Like I said before a federal sales tax would more than suffice and in a lot of cases would work better but please by all means continue to live in ignorance. Just because things have been done a certain way for a long time doesn't mean it's the best or most efficient way. "Where goes the Delta? To the sea, of course.  Your question is very valid and for once, I think most of the answers are too involved into mechanical details and are badly missing the big picture.  At the risk of over simplifying things, let me try to describe the situation in broad strokes: Inflation: the volume of money grows faster than production (including services).  Deflation: production increase faster than the volume of money.  Imagine an economy with 10 products and $10. 1 product = $1. In an inflationary scenario, money available increase: $20 for 10 products. 1 product = $2.  In a deflationary scenario, money available decrease: $5 for 10 products. 1 product = $0.5.  So far, it's pretty textbook. Now onto the stuff that you don't usually read in textbooks: Time.  Say 10 people are attending an auction, each with $10 bucks. 10 items are for sale. $100 and 10 items. Item price is $10. Now, if just before opening the bidding, you go around and give each person $40, every one has $50. Each product sells for $50. That's the picture people have of inflation. Prices have increased, but everybody has more money, so it comes down to the same thing.  Now, let's bring this example closer to reality: You have to distribute $400, so the total amount of money is $500, which means that the normal price of each item should be $50. Now, imagine that instead of giving money to everyone at the same time, you started by giving $40 to 1 guy who was hanging out in front. The auction starts. While you go around distributing the money, the first guy manages to buy 2 items at $10 each. Now, there is $480 in the market, and only 8 items, making each item $60 on average. The next guy to get money manages to snap 2 items at $15. 6 items left and $450 in play. Each item now costs $75....and keep increasing in price as things move along. People who get the money early buy items under their real value, and people who get paid at the end pick up the tab, because by then, there are only a few items left. Back to reality, while inflation means that wages eventually increase (and they do), actual purchasing decrease for most people due to this simple trick. Employees are pretty much at the end of the chain. Income tax Another major source of ""signal loss"" is income tax. It works by brackets, as you certainly know. Simplifying again because I am lazy: Take a guy who earns $100. Pays no taxes. Can buy 100 products at $1 each. Now, put in some inflation... He earns $500. He pays $50 in taxes and can buy 90 products at $5 each. By the time he earns $10,000, he can only buy 50 products on account of income tax. So this is another area where you are bleeding purchasing power, and why income tax, which was originally presented as a tax for the ultra-rich is now a fact of life for most people (except the ultra-rich, of course).  Money as debt Next stop: Money itself. Money is created as debt in our society. At the risk of over-simplifying things again, let's say Bank A has $1000 in assets. In the fractional reserve system (our current system), Bank A can lend out many times over that amount. Let's say $9,000, for a total of $10,000 (much more in reality). And of course, it lends that money at interest. When bank A has made $10,000 available through 10% interest loans, the total amount of money has increased by $10,000, but when the loans are paid back, $11,000 must be paid to the bank, so the net result of the operation is that $1,000 get taken out of the market.  This system explains why almost all companies and governments have huge debts, and why most of the world's large companies belong to financial institutions of some kind, and why most of the world's wealth rest in very very few hands.  To fully answer your question and provide details and references and names, one would have to write a book or 5. There is a lot more than can be said on the subject, and of course, all the examples given here are extremely simplified, but I think they illustrate the key issues pretty well.  Bottom-line is that our system is designed that way. Our economic system is rigged and the delta bleeds out on automatic." "I think you may have a significant misunderstanding here.  You have been renting your property out for two years, now.  There is no special ""roommate"" clause in the tax code; roommates are renters, and the rent they pay is rental income.  (If they were roommates in a property you both rented from a third party, that would be different.) See publication 527, chapter 4 for more details on the subject (search on ""Renting Part of Property"").  You should be: You may also consider ""Not renting for profit"" section, which may be closer to what you're actually thinking - of changing from ""Renting not for profit"" to ""Renting for profit"".  Not rented for profit means you can report on your 1040 as opposed to filing Schedule E, but it does mean you have to actually not make a profit (and remember, some of the money that goes to paying the mortgage is not deductible on this side of things since it's your property and you'll get that money back, presumably, when you sell it). If that is what you're asking about, it sounds like it's just a matter of money.  Are you going to start making money?  Or, are you going to start making enough significant upgrades/etc. to justify the tax deduction?  You should consider the actual, specific numbers carefully, probably with the help of a CPA who is familiar with this sort of situation, and then make the decision that gives you the best outcome (keeping in mind that there may be long-term impacts of switching from not-for-profit to for-profit rental treatment)." "The wash sale rule only applies when the sale in question is at a loss.  So the rule does not apply at all to your cases 3, 4, 7, 8, 11, 12, 15, and 16, which all start with a gain.  You get a capital gain at the first sale and then a separately computed gain / loss at the second sale, depending on the case, BUT any gain or loss in the IRA is not a taxable event due to the usual tax-advantaged rules for the IRA. The wash sale does not apply to ""first"" sales in your IRA because there is no taxable gain or loss in that case.  That means that you wouldn't be seeking a deduction anyway, and there is nothing to get rolled into the repurchase. This means that the rule does not apply to 1-8.  For 5-8, where the second sale is in your brokerage account, you have a ""usual"" capital gain / loss as if the sale in the IRA didn't happen. (For 1-4, again, the second sale is in the IRA, so that sale is not taxable.) What's left are 9-10 (Brokerage -> IRA) and 13-14 (Brokerage -> Brokerage).   The easier two are 13-14.  In this case, you cannot take a capital loss deduction for the first sale at a loss.  The loss gets added to the basis of the repurchase instead.  When you ultimately close the position with the second sale, then you compute your gain or loss based on the modified basis.  Note that this means you need to be careful about what you mean by ""gain"" or ""loss"" at the second sale, because you need to be careful about when you account for the basis adjustment due to the wash sale. Example 1: All buys and sells are in your brokerage account.  You buy initially at $10 and sell at $8, creating a $2 loss.  But you buy again within the wash sale window at $9 and sell that at $12.  You get no deduction after the first sale because it's wash.  You have a $1 capital gain at the second sale because your basis is $11 = $9 + $2 due to the $2 basis adjustment from wash sale. Example 2: Same as Example 1, except that final sale is at $8 instead of at $12.  In this case you appear to have taken a $2 loss on the first buy-sell and another $1 loss on the second buy-sell.  For taxes however, you cannot claim the loss at the first sale due to the wash.  At the second sale, your basis is still $11 (as in Example 1), so your overall capital loss is the $3 dollars that you might expect, computed as the $8 final sale price minus the $11 (wash-adjusted) basis. Now for 9-10 (Brokerage->IRA), things are a little more complicated.  In the IRA, you don't worry about the basis of individual stocks that you hold because of the way that tax advantages of those accounts work.  You do need to worry about the basis of the IRA account as a whole, however, in some cases.  The most common case would be if you have non-deductable contributions to your traditional IRA.  When you eventually withdraw, you don't pay tax on any distributions that are attributable to those nondeductible contributions (because you already paid tax on that part).  There are other cases where basis of your account matters, but that's a whole question in itself - It's enough for now to understand 1. Basis in your IRA as a whole is a well-defined concept with tax implications, and 2. Basis in individual holdings within your account don't matter. So with the brokerage-IRA wash sale, there are two questions:  1. Can you take the capital loss on the brokerage side?  2. If no because of the wash sale, does this increase the basis of your IRA account (as a whole)?  The answer to both is ""no,"" although the reason is not obvious. The IRS actually put out a Special Bulletin to answer the question specifically because it was unclear in the law. Bottom line for 9-10 is that you apparently are losing your tax deduction completely in that case. In addition, if you were counting on an increase in the basis of your IRA to avoid early distribution penalties, you don't get that either, which will result in yet more tax if you actually take the early distribution. In addition to the Special Bulletin noted above, Publication 550, which talks about wash sale rules for individuals, may also help some." you will start to see this from every country, as things get more global, countries are going to want to make sure people arent hiding taxes from the government while enjoying all the protections a state has to offer. Like military, intelligence, protection from unfair trade practices,.. heck look at the us gov going up to bat for exxon against chavez and exxon avoids paying taxes in the US on their profits, like most multi national corps.   states that see outlays straining against lack of revenues, and the distaste that comes from raising taxes, will go after those they think are avoiding them. No one really cares when you go after people hiding money. Government's tax citizens and businesses in their currency. Earnings (even earnings in cryptocurrencies) are taxable income. "Do I have to pay the stock investment income tax if I bought some   stocks in 2016, it made some profits but I didn't sell them at the end   of 2016? You pay capital gains taxes only when you sell the stocks. When you sell the stock within a year you will pay the short term capital gains rate which is the same rate as your ordinary income. If the stock pays dividends, however, you will have to pay taxes in the year that the dividend was paid out to you. I bought some stocks in 2011, sold them in 2012 and made some gains.   Which year of do I pay the tax for the gains I made? You would pay in 2012, likely at the short term gain rate. I bought some stocks, sold them and made some gains, then use the   money plus the gains to buy some other stocks before the end of the   same year. Do I have to pay the tax for the gains I made in that year? Yes. There is a specific exception called the ""Wash Sale Rule"", but that would only apply if you lost money on the original sale and bought a substantially similar or same stock within 30 days. Do I get taxed more for the money I made from buying and selling   stocks, even if the gains is only in hundreds? More than what? You pay taxes based on the profit you make from the investment. If you held it less than a year it is the same tax rate as your regular income. If you held it longer you pay a lower tax rate which is usually lower than your regular tax rate." I like how whether or not its okay to do *exactly* what the tax code says is determined by your presumed intent in following the tax code, and not whether or not you actually followed the tax code.   Besides, what reasonable person or business *doesn't* minimize their tax burden, in the same way they minimize *every* and *any* burden?