Author Topic: Can I put this cash in bank?!  (Read 3128 times)

zachd

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Can I put this cash in bank?!
« on: April 01, 2014, 11:15:19 AM »

I feel like I read a thread about this but can't find it.

I have a good amount of cash on hand from selling stuff I had around.

I've been hesitant to put it in the bank - I have this idea that if I do that, I will need to pay tax on it as income and I'd rather not do that.

Is my idea correct, or not really?  Can someone explain, this has been bugging me.


Gin1984

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Re: Can I put this cash in bank?!
« Reply #1 on: April 01, 2014, 11:20:50 AM »
Is this stuff that you paid more for than you sold it for?  Then no, you do not have to pay taxes on it.

Jamesqf

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Re: Can I put this cash in bank?!
« Reply #2 on: April 01, 2014, 11:23:50 AM »
No, you don't have to pay tax on bank deposits as income.  First, deposits aren't even tracked (openly, anyway) unless they're over $10K or so.  Second, if you do get money from selling stuff, only your profit would be taxed.  Since this is stuff you had sitting around, presumably you bought it for more than you got for selling it, so you're not making a profit that could be taxed.

AJ

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Re: Can I put this cash in bank?!
« Reply #3 on: April 01, 2014, 11:25:21 AM »
How much is a "good amount"? Like Gin1984 said, you don't have to pay taxes is you didn't make money, but depositing a large amount of cash may trigger warning bells you might now want to deal with. The bank's idea of "large amount" and yours may be different, tho...

the fixer

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Re: Can I put this cash in bank?!
« Reply #4 on: April 01, 2014, 11:38:04 AM »
I've known the answer to this question academically for a while now, but isn't the burden of proof on the OP as the taxpayer to show that the deposit was not taxable? i.e. one needs to be able to describe what was sold to get that money and what its original cost was? Or will the IRS just take one's word for it during an audit?

Guy Incognito

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Re: Can I put this cash in bank?!
« Reply #5 on: April 01, 2014, 11:41:10 AM »
drug money?

Mr. FI

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Re: Can I put this cash in bank?!
« Reply #6 on: April 01, 2014, 11:42:18 AM »
What AJ said. There is a misconception that a deposit will be taxed. How exactly? How would the IRS know that the cash you deposit isn't a gift from your grandmother? Unless you got hardcore audited, there is absolutely no chance you could be taxed for this. But a cash deposit over $10,000 does trigger an alert. This is for the fact that large cash deposits have been linked to terroist groups, money laundering rings, drug lords, etc.

If you're not doing anything illegal, there is nothing to worry about. They will simply verify your info and you'll be on a list that most likely few will care about UNLESS you continue to have large cash deposits. I have worked for a bank the last 3 years and from the inside, I can tell you you have nothing to worry about.

zachd

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Re: Can I put this cash in bank?!
« Reply #7 on: April 01, 2014, 11:51:55 AM »

It might be $3k.  No, I haven't made any profit.
So it's pretty safe to do this.  The IRS doesn't somehow magically match up what you said you made in a year with what you put in your bank account. 

zachd

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Re: Can I put this cash in bank?!
« Reply #8 on: April 01, 2014, 11:55:15 AM »
What AJ said. There is a misconception that a deposit will be taxed. How exactly? How would the IRS know that the cash you deposit isn't a gift from your grandmother? Unless you got hardcore audited, there is absolutely no chance you could be taxed for this. But a cash deposit over $10,000 does trigger an alert. This is for the fact that large cash deposits have been linked to terroist groups, money laundering rings, drug lords, etc.

If you're not doing anything illegal, there is nothing to worry about. They will simply verify your info and you'll be on a list that most likely few will care about UNLESS you continue to have large cash deposits. I have worked for a bank the last 3 years and from the inside, I can tell you you have nothing to worry about.

Awesome, thanks (and thanks everyone) for the info.
Kind of what I thought but was not sure.

My wife will probably be happy about emptying out that 'stash spot'