Question about total annual funds withdrawn from PP

NewYork · #1 08-15-2015

Here's a question... Suppose I have a number of stlth accounts, each withdraws to a different bank account every week or two and then I withdraw that to re-purchase product again (cash transaction) and circulate and re-circulate those funds in that matter a good bit (for a narrow profit margin, but the total makes it worth my time, I have a health issue that severely limits what I'm able to do, and it's nice to make a little something plus do what I enjoy, and all that is within my abilities).

Anyway, my concern is even though my withdraws are under 1K per week, and my annual take-home is well, well below the level that taxes would be owed, but if someone somewhere were to look at all my annual bank withdrawls and total them up, they'd think I'd have a large sum somewhere. Is there anyone anywhere that monitors this? Tax, bank, or otherwise related? Everything I buy is cash, everything I take in isn't (as far as going through the bank) and I'm worried that at some point it might cause me an issue, especially as my bank accounts are all in a way linked to me and my SS#.

jeffweico · #2 08-15-2015

Well, it depends. If you are reporting your income and paying taxes on your PROFITS (remember, you only need to pay taxes on your profits, not your gross income) then the IRS isn't going to bother you.

And you did not say whether or not you are receiving disability, but there ARE rules regarding that. I am not aware of all of them, but I know that you are supposed to report any income that comes in from wages and business income could be considered wages. It does not always affect your eligibility - I think you can earn something like $700 or so per month before they consider it substantial income. But if you are exceeding their threshold and not reporting the income and they find out about it, you COULD potentially lose your disability benefits. I think it would be unlikely, but if you have enough of an income from this where it could be a problem, you might want to ask your lawyer for advice on what to do. Or at least ask someone who knows the ins and outs of Social Security disability. Because you do not want to take any chances if you are depending on that income and especially the insurance.

I know that people have been caught cheating the system for disability (and I am not saying you are doing that, I don't even know if you ARE on disability) but I don't have a clue as to how they catch them. It COULD be through bank deposits, but I don't know.

But if you are paying your taxes and are NOT receiving disability, then I don't see who would have an issue with it.

NewYork · #3 08-15-2015

Thanks for the input, that's good info. For my particular situation, I'm not collecting any disability, and since my total PROFIT is very low, I don't file taxes either. But even withdrawing 800-900 per week to the various bank accounts, it worries me that if there is anyone out there keeping tabs on this, it could look like I'm really pulling in money. (at least to me that would be a decent income).

Most of what I sell are hand made craft type things, and most of what I spend is on raw materials (specialty wood and stones). The people who make the crafts do a few errands for me when they make their weekly delivery of product to me, and this is (a big) part of why this little bit of profit on so much turnaround is still worth my time.

Anyway, I don't collect disability, so those concerns don't apply to me, but because of the stories relating to tax stuff, this does worry me. Since someone can see across all my bank accounts by my SS#, I'm wondering if anyone monitors or totals the annual activity...?

jeffweico · #4 08-15-2015

As far as I know, nobody is tracking your information across banks. COULD they find that if they wanted to? Probably. But they are not monitoring everybody's bank accounts. At least not that I know of.

If there are large transactions, or suspicious transactions, then the bank has to report that to the treasury department, but I do not think you fall into this category. We are talking about one transaction of $10,000 or more. And regular withdrawals of $800 or $900 are not going to raise suspicions. Besides, if you can prove your expenses and do not make enough to have to file taxes, then no laws have been broken, so I would not worry about it.

NewYork · #5 08-17-2015

Thanks. I'm sure I'm not the only one that pulls from multiple pp accounts to different banks, so I assumed this wasn't something worth worrying about if I couldn't find it mentioned on here before.... and I'm sure other people withdraw way way more than I do, but with similarly small profit margins. My worry is running into a problem and suddenly having paperwork and to prove my (lack of) income. Maybe I'm just being paranoid.

jojo2012 · #6 08-17-2015

Best thing to do is keep written accounting of all your expenses, while its not proof of your expenses in the event of a audit a good record of expenses over a long time line could go a long way