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Reply #20: The problem is that, overall, these leads to a reduction in federal taxes. [View All]

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Xithras Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-23-10 11:18 AM
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20. The problem is that, overall, these leads to a reduction in federal taxes.
If you make $50, spending $300 on a business license may seem outrageous, but that $300 is a deductible business expense on your schedule C, so everything comes out even at the end of the year.

When cities make tax grabs like this, what they're REALLY doing is yanking tax dollars from the federal government. If Philly hadn't demanded that $300, the $50 profit would have been taxed as miscellaneous income on her federal return, buoying the federal budget by a few pennies. Because of Philly's tax grab, she can now show, and deduct, a $250 operating loss for the year from her taxes.

It's not a big deal for one person, but as more and more communities try this, it could start to have a detectable effect on federal tax revenues.
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  -Philly requiring bloggers to pay a $300 Business License Fee if they show any profit RamboLiberal  Aug-23-10 09:53 AM   #0 
  - Good. There are a lot of other ways people are profiting without taxes...  Xenotime   Aug-23-10 09:54 AM   #1 
  - They'll just incorporate in Delaware.  Orrex   Aug-23-10 09:58 AM   #3 
  - Heh.  TZ   Aug-23-10 11:52 AM   #22 
  - What the hell Philly services is a blogger using?  RamboLiberal   Aug-23-10 09:58 AM   #4 
  - Self employed people already pay taxes  blogslut   Aug-23-10 10:03 AM   #6 
     - Who said anything about being self employed?!?  Xenotime   Aug-23-10 10:14 AM   #7 
        - That is self employment income  blogslut   Aug-23-10 10:21 AM   #8 
        - It's only 50 bucks. The threshold is 400 dollars before the IRS considers  Raineyb   Aug-23-10 10:56 AM   # 
        - If they have a net profit then they should be paying income taxes,  drm604   Aug-23-10 10:25 AM   #10 
           - net? Really?  Sheepshank   Aug-23-10 02:18 PM   #30 
              - Apples and oranges.  drm604   Aug-23-10 09:12 PM   #42 
  - Bloggers.... Profit?!?!?!?! n/a  thatgemguy   Aug-23-10 09:56 AM   #2 
  - If it's just a hobby for her...  Fleshdancer   Aug-23-10 10:00 AM   #5 
  - what's the problem?  northzax   Aug-23-10 10:24 AM   #9 
  - Should all authors that live in Philly pay for a business license?  blogslut   Aug-23-10 10:30 AM   #12 
     - Writers have to pay taxes, too.  tinrobot   Aug-23-10 10:44 AM   #13 
        - That's not what I asked  blogslut   Aug-23-10 10:48 AM   #14 
           - All writers making money from writing should, yes.  uncommon   Aug-23-10 10:58 AM   #16 
              - What governing body requires writers to have a license?  blogslut   Aug-23-10 11:05 AM   #17 
                 - IF she is receiving money for her work, then she IS selling "tangible" goods and she is  uncommon   Aug-23-10 11:11 AM   #18 
                 - Perhaps I'm not making myself clear  blogslut   Aug-23-10 11:16 AM   #19 
                    - Yes, I have run a very small business and had to get a license.  uncommon   Aug-23-10 11:57 AM   #23 
                       - Perhaps...  blogslut   Aug-23-10 12:21 PM   #24 
                          - I would argue that written works are tangible so that argument doesn't wash.  uncommon   Aug-23-10 01:51 PM   #27 
                          - you might argue that, but there are legal definitions of what is tangible...  yawnmaster   Aug-23-10 02:40 PM   #34 
                             - It's the same as a book or a newspaper.  uncommon   Aug-23-10 02:49 PM   #36 
                                - the book or newspaper are tangible, the words and ideas in the book or newspaper are intangible...  yawnmaster   Aug-23-10 03:03 PM   #37 
                          - Goods or services...two different things, both are businesses  Sheepshank   Aug-23-10 02:26 PM   #32 
                 - I make money writing. I pay taxes.  tinrobot   Aug-23-10 01:48 PM   #26 
                    - Maybe that applies in your state  blogslut   Aug-23-10 02:43 PM   #35 
                       - I'm an Amazon affiliate as well  tinrobot   Aug-23-10 05:45 PM   #39 
  - Ridiculous..she already pays self-employment taxes on whatever she earns from her blog.  krabigirl   Aug-23-10 10:26 AM   #11 
  - Um, anyone running a business has to do this. Blogging for profit is a business.  uncommon   Aug-23-10 10:56 AM   #15 
  - +1 n/t  Bonhomme Richard   Aug-23-10 11:50 AM   #21 
  - The problem is that, overall, these leads to a reduction in federal taxes.  Xithras   Aug-23-10 11:18 AM   #20 
  - I see there are idiots here saying she should pay $300 in taxes on $50 profit. (nt)  w4rma   Aug-23-10 01:45 PM   #25 
  - That isn't what people are saying at all.  uncommon   Aug-23-10 01:52 PM   #28 
  - I agree, but there should be minimum amounts  tinrobot   Aug-23-10 02:09 PM   #29 
     - But how will they know until after the business has been operational?  uncommon   Aug-23-10 02:21 PM   #31 
        - Good question.  tinrobot   Aug-23-10 05:47 PM   #41 
  - using "profits" as a guide makes one just as big of an idiot.  Sheepshank   Aug-23-10 02:30 PM   #33 
     - My city taxes gross income  tinrobot   Aug-23-10 05:46 PM   #40 
  - I'd claim my business was in whatever city the server was in.  JoeyT   Aug-23-10 05:36 PM   #38 

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