Author Topic: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig  (Read 1047106 times)

DadJokes

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3800 on: January 20, 2020, 06:39:52 PM »
It sounds like there is room for a business-minded mustachian to establish a better-ran company.

arebelspy

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3801 on: January 21, 2020, 01:02:17 AM »
No such issues with old company.  Move your cards there if possible.

Yeah, that's what I've recommended for awhile; if they'll take your cards, use old company. Unfortunately they're totally saturated with cards, so they only take very old/high limit cards.

Otherwise, yeah, the payment issues with New Company are frustrating. As far as I know, everyone has always been paid, it's just very poor business practice to not have it timely. As always, if you need assistance with something like that, PM me.

It sounds like there is room for a business-minded mustachian to establish a better-ran company.

Yeah. This has been the case for years. Interestingly, one of the larger and longest lived (since 2008 or so?) TL companies, BoostMyScore, just went out of business. https://www.boostmyscore.com/
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Car Jack

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3802 on: January 21, 2020, 07:05:43 AM »
I'm assuming the old company hasn't gotten any better with sales

Better than what?  I fill 8 to 10 spots a month with them.

What kind of cards do you use? I have 5+ years, 20k+ credit line and don't get a lot of orders. I heard that there is more demand for cheaper cards.

These are all low limit, new cards.  A couple times, they opened up for these.  2 months and $25 each. 

I have one that's older with a $20k limit and it only gets an AU maybe every 4 months or so.  I also was able to recently add a very old (17 year) $20k limit card but have had no adds on it.

EliteZags

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3803 on: January 21, 2020, 10:46:52 AM »
BoostMyScore was actually bought out by another company so their going to transition cardholders over

solon

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3804 on: January 21, 2020, 02:20:38 PM »
BoostMyScore was actually bought out by another company so their going to transition cardholders over

Who bought it? How did you come by this intel?

EliteZags

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3805 on: January 21, 2020, 02:47:57 PM »
COO told me over phone forgot the name wasn't one I'd heard of before, said they're working to move everyone over within the next few weeks

solon

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3806 on: January 21, 2020, 08:06:23 PM »
30K card, 20 years perfect history, 3 sales in 3 years
10K card, 24 months old, 6 spots sold in the last year
1K card, 18 months old, haven't had a month without both spots sold

Is that right? A $1000 card? I didn't know you could get one that low.

flashflooder

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3807 on: January 22, 2020, 06:38:13 AM »
Anyone gotten their 1099-MISC from the New Company yet?  I realize it's early, but I never got one last year until I e-mailed them about it.

chuckster

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3808 on: January 22, 2020, 12:35:29 PM »
30K card, 20 years perfect history, 3 sales in 3 years
10K card, 24 months old, 6 spots sold in the last year
1K card, 18 months old, haven't had a month without both spots sold

Is that right? A $1000 card? I didn't know you could get one that low.

I know, right? Funny thing is it started at a $500 card and I had to bug them for a limit increase. Twice. They wouldn't do one until the card was 12 months old.

I only opened it to sell tradelines on it and it's my most consistent seller. I have no idea what 18 months of on-time payments could possibly do on only a $1000 credit line, but, apparently someone out there is buying it.

solon

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3809 on: January 22, 2020, 01:18:05 PM »
30K card, 20 years perfect history, 3 sales in 3 years
10K card, 24 months old, 6 spots sold in the last year
1K card, 18 months old, haven't had a month without both spots sold

Is that right? A $1000 card? I didn't know you could get one that low.

I know, right? Funny thing is it started at a $500 card and I had to bug them for a limit increase. Twice. They wouldn't do one until the card was 12 months old.

I only opened it to sell tradelines on it and it's my most consistent seller. I have no idea what 18 months of on-time payments could possibly do on only a $1000 credit line, but, apparently someone out there is buying it.

What bank is it? Maybe I'll pick one up. And do you have a referral link?

EliteZags

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3810 on: January 22, 2020, 01:50:40 PM »
selling for what? $30-40? I guess that's still worth the effort?

chuckster

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3811 on: January 22, 2020, 02:22:53 PM »
30K card, 20 years perfect history, 3 sales in 3 years
10K card, 24 months old, 6 spots sold in the last year
1K card, 18 months old, haven't had a month without both spots sold

Is that right? A $1000 card? I didn't know you could get one that low.

I know, right? Funny thing is it started at a $500 card and I had to bug them for a limit increase. Twice. They wouldn't do one until the card was 12 months old.

I only opened it to sell tradelines on it and it's my most consistent seller. I have no idea what 18 months of on-time payments could possibly do on only a $1000 credit line, but, apparently someone out there is buying it.

What bank is it? Maybe I'll pick one up. And do you have a referral link?

Citi. Somewhere else in the thread it was mentioned how comically tight they are in limits.

YMMV, of course, I just signed up out of the blue and that's the limit they gave me. I guess you can always call in and have an existing line reduced. Tell them you're lowering your limits for whatever reason... getting finances under control, adjusting your credit score, whatever.

And thanks, but, it doesn't appear the Citi Double Cash card gives referral links.
« Last Edit: January 22, 2020, 02:29:29 PM by chuckster »

therethere

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3812 on: January 22, 2020, 02:35:24 PM »
30K card, 20 years perfect history, 3 sales in 3 years
10K card, 24 months old, 6 spots sold in the last year
1K card, 18 months old, haven't had a month without both spots sold

Is that right? A $1000 card? I didn't know you could get one that low.

I know, right? Funny thing is it started at a $500 card and I had to bug them for a limit increase. Twice. They wouldn't do one until the card was 12 months old.

I only opened it to sell tradelines on it and it's my most consistent seller. I have no idea what 18 months of on-time payments could possibly do on only a $1000 credit line, but, apparently someone out there is buying it.

What bank is it? Maybe I'll pick one up. And do you have a referral link?

Citi. Somewhere else in the thread it was mentioned how comically tight they are in limits.

YMMV, of course, I just signed up out of the blue and that's the limit they gave me. I guess you can always call in and have an existing line reduced. Tell them you're lowering your limits for whatever reason... getting finances under control, adjusting your credit score, whatever.

And thanks, but, it doesn't appear the Citi Double Cash card gives referral links.

What is the payout on that type of card (1 year, <10k limit)?

chuckster

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3813 on: January 22, 2020, 02:49:17 PM »

What is the payout on that type of card (1 year, <10k limit)?

A whopping $25 per slot. So best case $200/year. Eventually it might age up and I might consider raising the limit. Or if a higher limit slows sales, I'll just get a new card and start over. I'd rather have a lot of small cards grinding out a little bit of earnings rather than a few big cards that collect nothing but dust.

katsiki

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3814 on: January 22, 2020, 08:45:49 PM »
Anyone gotten their 1099-MISC from the New Company yet?  I realize it's early, but I never got one last year until I e-mailed them about it.

I stopped using new company so I don't know. 

FYI for anyone with old company wondering.  1099's are available in their payroll web site.  Looks like I downloaded mine on the 12th.

nickelwise

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3815 on: January 24, 2020, 08:35:21 AM »
Are you guys doing the self-employment schedules or reporting your sales as other income? Not excited about paying self-employment taxes, but I don't want to get myself in trouble either. Would appreciate any guidance from those of you who've been doing this for a while.

If anyone doesn't want to post publicly about how they report the income, I would appreciate PMs as well. Thanks!

secondcor521

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3816 on: January 24, 2020, 09:25:34 AM »
Are you guys doing the self-employment schedules or reporting your sales as other income? Not excited about paying self-employment taxes, but I don't want to get myself in trouble either. Would appreciate any guidance from those of you who've been doing this for a while.

If anyone doesn't want to post publicly about how they report the income, I would appreciate PMs as well. Thanks!

I found and read the rules for determining where to report the income - if it's "hobby" income, it goes on other income; if it's "business" income it goes on schedule C.  However, the rules are, IIRC and IMHO, more of a set of examples that try to codify "you should know when it's a hobby and you should know when it's a business".  So it's not clear cut.

In the past I've reported it as hobby income because somewhere in those rules I remember reading about it being sporadic or occasional.  Also I didn't make much, if any effort, to improve my income in this area.  In 2019 my sales were reasonably regular, and I did do some things to increase my piggybacking income, so I'm probably going to report it on a Schedule C for 2019.

Note that although a Schedule C requires the payment of SE taxes, you get one half of SE taxes as a credit.  You can also deduct business expenses against your business income.  Your Schedule C business might qualify for the QBI (AKA Section 199A) deduction.  Schedule C net income also counts as earned income, which enables you to make contributions to an IRA, which may entitle you to a deduction/adjustment as well as the retirement savings tax credit.

nickelwise

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3817 on: January 24, 2020, 11:04:59 AM »
secondcor521 - Thanks for lots of good info.

You make it sound like something of a gray area as to when it's considered a hobby or a business. I might follow your example and stick it in other income until my sales start getting a little closer to the numbers in the topic title. I'd be encouraged if lots of users here have been reporting AU sales as other income for years with no flags raised.

For my situation, I work full-time as a regular W2 employee so I'm already maxing my regular IRA with that earned income, so I don't think Schedule C income benefits me there since I already have plenty of earned income to show. But if I do start using Schedule C, I might look into SEP-IRA - I don't know much about it, but as far as i know you can do 401(k), HSA, IRA, and SEP-IRA all in the same year. My understanding is also that SEP-IRA can be converted into Roth IRA when you're doing a conversion ladder, just like a regular IRA.

I doubt I have much to deduct as a business expense - there's really no expense incurred to me.

Being able to deduct half of the FICA taxes makes sense - that's just like how the "employer half" of the employment taxes for any given employee would be a business expense, right?
 
I wasn't familiar with the QBI deduction so it seems I have a lot to research about it.

Appreciate any more input anyone has!

Michael in ABQ

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3818 on: January 24, 2020, 12:30:16 PM »
I'll just chime in, I don't think this could be considered a hobby. Anyone entering into selling tradelines is doing so to make a profit. It's not like you're gardening and maybe sell some produce to your neighbors or doing some woodworking and occasionally selling something. My understanding of tax law/regulation is that if you're doing it to make a profit it's not a hobby, it's a business.

Padonak

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3819 on: January 24, 2020, 12:58:42 PM »
I report tradeline income as Schedule C income, not as a hobby. Last year used QBI deduction (20% of that income) and opened a SEP IRA to reduce it even further.

chuckster

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3820 on: January 24, 2020, 01:08:45 PM »
I report tradeline income as Schedule C income, not as a hobby. Last year used QBI deduction (20% of that income) and opened a SEP IRA to reduce it even further.

Same here. Not a hobby.

Padonak

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3821 on: January 24, 2020, 01:30:06 PM »
For those who report tradeline income as business income, do you pay estimated quarterly taxes and FICA contributions? I never paid them quarterly but was never fined because I also had employment income and normally overpaid my income tax with each paycheck, so it probably canceled itself out between overpaid income tax by employer and non-paid taxes and FICA for tradeline income throughout the year. I just received a smaller refund as a result. In the future, when I no longer work, this could change, so I wonder if I should start paying quarterly just in case to avoid fines. Is there a good rule of thumb to determine that?
« Last Edit: January 24, 2020, 01:34:42 PM by Padonak »

EliteZags

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3822 on: January 24, 2020, 03:24:05 PM »
doubt I'll ever care enough to go through the trouble or reporting it as business income, unless I'm approaching 5 figures in a year

IRS should just be impressed that I'm reporting it at all

katsiki

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3823 on: January 25, 2020, 07:00:33 AM »
I report tradeline income as Schedule C income, not as a hobby. Last year used QBI deduction (20% of that income) and opened a SEP IRA to reduce it even further.

Same for the last 2 years.  Will do the same this time.  Funded sep ira first year but did not fund last year as I recall.

Car Jack

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3824 on: January 27, 2020, 10:41:01 AM »
Here's a few things that might help.

The low limit, new card opening comes up now and then at the old company.  I've got 5 cards there now.  They consistently sell 2 slots every 2 month period.  $25 each slot.  Barclay (2) and US Bank (2) have online adds, so that's easy as pie.  Wait for the next opening as they fill what's needed, then close off.

Watch your account and on the "remove AU" date +1, remove your AU.  I'm finding that I do this and the next day, I've got new orders to take their place.  If you fud around and don't remove them for a week, you very well could miss your closing date and won't get anything till the next time around.

Arebelspy has said that he does Amazon ads.  I used to ignore that and go to the gas station and put in $3 of gas, swap cards, another $3 gas.  At this point, with over 10 slots a month getting filled, nobody needs all that hassle.  Add all your cards to Amazon, remember to change the refill to $3 or $4 and just make your ads.  Keep a spread sheet with last purchase date, closing date, when you last checked the account.  Or I guess you can just figure out expected buy dates and just buy then.  I've been doing this for only about a month and boy....it makes life easier.  Then I need to buy oil for an oil change and bam....I use the money I've dumped into the account.  Be sure your credit cards are all on auto pay and you're cruising with near zero effort.

EliteZags

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3825 on: January 27, 2020, 11:26:28 AM »
I've never once made a single transaction using any AU cards over 2 years 30+ adds between Chase/Citi/Barlcays and never had an issue with posting

Is someone suggesting that the AU card needs to be used at all for it to post correctly?

or actually I assume you're probably be talking about just using each actual main card you're selling off of
« Last Edit: January 27, 2020, 11:28:24 AM by EliteZags »

frugalnacho

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3826 on: January 27, 2020, 11:50:53 AM »
I've never once made a single transaction using any AU cards over 2 years 30+ adds between Chase/Citi/Barlcays and never had an issue with posting

Is someone suggesting that the AU card needs to be used at all for it to post correctly?

or actually I assume you're probably be talking about just using each actual main card you're selling off of

The account itself has to be used.  It doesn't matter if it's your card or the AU card.  Most people here don't actually use the card they send for the AU.  I have never even activated one.

Car Jack

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3827 on: January 27, 2020, 12:42:42 PM »
Yah, main card to get a balance reported.  No, any AU card goes right in the shredder when it arrives.

DadJokes

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3828 on: January 27, 2020, 12:49:52 PM »
For those still wondering about whether it should be considered business or hobby income, the IRS does have guidelines:

  • Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
  • Whether the time and effort you put into the activity indicate you intend to make it profitable.
  • Whether you depend on income from the activity for your livelihood.
  • Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
  • Whether you change your methods of operation in an attempt to improve profitability.
  • Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
  • Whether you were successful in making a profit in similar activities in the past.
  • Whether the activity makes a profit in some years and how much profit it makes.
  • Whether you can expect to make a future profit from the appreciation of the assets used in the activity.

No one item can push you in the direction of it being a business or a hobby. Rather, all go into consideration.

The IRS does have a rule of thumb that is used, saying that an activity should earn a profit in 3 out of 5 years to be considered a business. That's generally to prevent people from claiming losses year after year to reduce taxes from other activities, but the same could apply to tradelines. If you aren't ever losing money, then it may be difficult to justify it as a hobby.

robartsd

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3829 on: January 27, 2020, 02:34:39 PM »
If you aren't ever losing money, then it may be difficult to justify it as a hobby.
The IRS doesn't care if you claim a routinely profitable activity as a hobby unless it is depended on for a significant portion of your income. A few hours a month for what amounts to pocket change is fine as a hobby; since it also never shows a loss it is fine as a business too.

chuckster

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3830 on: January 30, 2020, 11:40:01 AM »
Anyone gotten their 1099-MISC from the New Company yet?  I realize it's early, but I never got one last year until I e-mailed them about it.

Mine is coming in the mail today.

Michael in ABQ

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3831 on: January 30, 2020, 11:47:48 AM »
If you aren't ever losing money, then it may be difficult to justify it as a hobby.
The IRS doesn't care if you claim a routinely profitable activity as a hobby unless it is depended on for a significant portion of your income. A few hours a month for what amounts to pocket change is fine as a hobby; since it also never shows a loss it is fine as a business too.

Pretty sure the IRS want's you to claim the income and pay taxes on it. I don't know what (if any) tax difference there is between claiming $1,000 in income from a hobby versus a business. I think the distinction is mainly so somebody can't say they have a "business" that losses thousands every year (reducing taxable income) when really it's a hobby like raising horses, hunting, skiing, crafting, etc.

secondcor521

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3832 on: January 30, 2020, 12:37:39 PM »
If you aren't ever losing money, then it may be difficult to justify it as a hobby.
The IRS doesn't care if you claim a routinely profitable activity as a hobby unless it is depended on for a significant portion of your income. A few hours a month for what amounts to pocket change is fine as a hobby; since it also never shows a loss it is fine as a business too.

Pretty sure the IRS want's you to claim the income and pay taxes on it. I don't know what (if any) tax difference there is between claiming $1,000 in income from a hobby versus a business. I think the distinction is mainly so somebody can't say they have a "business" that losses thousands every year (reducing taxable income) when really it's a hobby like raising horses, hunting, skiing, crafting, etc.

There are tax differences between deciding something is a hobby versus a business:

1.  Business income is earned income and can contribute to eligibility for IRA contributions (and thus the retirement savings tax credit).  With a person with really low income, it may affect whether or not they meet the requirement to file.
 Hobby income is considered unearned income.
2.  A person pays both sides of Social Security and Medicare taxes on business income, and receives a credit or adjustment for one half of those taxes.  Not so with a hobby.
3.  A person can deduct business expenses against business income.  Not so with a hobby.
4.  A person may qualify for the QBI business deduction with business income.  Not so with a hobby.
5.  Business income is usually reported on Schedule C.  Hobby income is included with other income on Schedule 1 line 8 (on a 2019 return).

Pretty sure most of that is right.  If not, someone more qualified will come along and correct me.

robartsd

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3833 on: January 30, 2020, 03:12:34 PM »
There are tax differences between deciding something is a hobby versus a business:

1.  Business income is earned income and can contribute to eligibility for IRA contributions (and thus the retirement savings tax credit).  With a person with really low income, it may affect whether or not they meet the requirement to file.
 Hobby income is considered unearned income.
2.  A person pays both sides of Social Security and Medicare taxes on business income, and receives a credit or adjustment for one half of those taxes.  Not so with a hobby.
3.  A person can deduct business expenses against business income.  Not so with a hobby.
4.  A person may qualify for the QBI business deduction with business income.  Not so with a hobby.
5.  Business income is usually reported on Schedule C.  Hobby income is included with other income on Schedule 1 line 8 (on a 2019 return).

Pretty sure most of that is right.  If not, someone more qualified will come along and correct me.
I think business losses can even be deducted against other income (if not, I'm certain it can be carried forward to deduct against business income in another year). I don't think the IRS cares if you consider selling tradelines to be a hobby or a business; but they certainly would not be OK with not reporting it at all (unless you are not required to file).

secondcor521

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3834 on: January 30, 2020, 04:38:35 PM »
There are tax differences between deciding something is a hobby versus a business:

1.  Business income is earned income and can contribute to eligibility for IRA contributions (and thus the retirement savings tax credit).  With a person with really low income, it may affect whether or not they meet the requirement to file.
 Hobby income is considered unearned income.
2.  A person pays both sides of Social Security and Medicare taxes on business income, and receives a credit or adjustment for one half of those taxes.  Not so with a hobby.
3.  A person can deduct business expenses against business income.  Not so with a hobby.
4.  A person may qualify for the QBI business deduction with business income.  Not so with a hobby.
5.  Business income is usually reported on Schedule C.  Hobby income is included with other income on Schedule 1 line 8 (on a 2019 return).

Pretty sure most of that is right.  If not, someone more qualified will come along and correct me.
I think business losses can even be deducted against other income (if not, I'm certain it can be carried forward to deduct against business income in another year). I don't think the IRS cares if you consider selling tradelines to be a hobby or a business; but they certainly would not be OK with not reporting it at all (unless you are not required to file).

You are essentially correct.  The bottom line from your Schedule C contributes to the earned income section on your tax return.  So if you have $100K in W-2 income and a $10K Schedule C loss, then you end up with a $90K total income.

I think the IRS expects you to report things correctly.  I'm not sure how hard the agent would work to check on the hobby / business question; I think they have much more productive things to go after.  But you are very correct in that if you have any income reported to the IRS, their computers check to make sure it got reported on your tax return somewhere, and they'll spit out automatic notices if there is income missing.

Padonak

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3835 on: January 30, 2020, 06:40:08 PM »
How much difference does it make if you report tradeline income as a hobby or business? Let's say your salary is 100K and you earn another 5K selling tradelines (not my numbers, just an example). What would be the difference approx? You would have to pay FICA taxes on business income but not hobby income, correct? But also you would be able to claim QBI deduction (only 80% of business income is taxable) and open a SEP IRA, so that would offset some of the FICA payments.

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3836 on: January 30, 2020, 07:59:48 PM »
How much difference does it make if you report tradeline income as a hobby or business? Let's say your salary is 100K and you earn another 5K selling tradelines (not my numbers, just an example). What would be the difference approx? You would have to pay FICA taxes on business income but not hobby income, correct? But also you would be able to claim QBI deduction (only 80% of business income is taxable) and open a SEP IRA, so that would offset some of the FICA payments.

It would be hard to say.  It would depend partly on how much in business expenses you chose to deduct, as well as your overall AGI (Social Security taxes end at a certain amount of earned income).

But roughly 15.3% of net income for SE taxes minus 7.65% of net income for SE tax adjustment minus 20% of QBI.  So probably in most cases worth it to report as business income.

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3837 on: January 31, 2020, 06:04:46 AM »
How do you add the SSN online through Barclays? I saw a previous post that said to opt out of getting a card, but I donít get the option to add the SSN.

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3838 on: January 31, 2020, 06:43:05 AM »
How do you add the SSN online through Barclays? I saw a previous post that said to opt out of getting a card, but I donít get the option to add the SSN.

You don't.  Just the address is enough to post for the AU.

secondcor521

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3839 on: January 31, 2020, 09:50:06 AM »
How do you add the SSN online through Barclays? I saw a previous post that said to opt out of getting a card, but I donít get the option to add the SSN.

You don't.  Just the address is enough to post for the AU.

My opinion based on some experience is it takes three bits of data to post an AU.  It can either be name/DOB/address, or name/SSN/address, or name/DOB/SSN.

I don't recall which bits Barclays takes on their online add form, but I know that the Barclays online add form works for AUs to post.

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3840 on: January 31, 2020, 12:37:18 PM »
last time I tried on Barclays pretty sure it was just name/DOB, also never seen any card ask for address we aren't even given it
strange since there are a few with common names, and DOB could overlap

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3841 on: January 31, 2020, 01:03:17 PM »
last time I tried on Barclays pretty sure it was just name/DOB, also never seen any card ask for address we aren't even given it
strange since there are a few with common names, and DOB could overlap

Barclays asks for name, DOB, relationship, and does have a spot to enter the AU address (or use your own).  Both Old Company and New Company provide AU addresses.

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3842 on: February 01, 2020, 09:30:34 AM »
How much difference does it make if you report tradeline income as a hobby or business? Let's say your salary is 100K and you earn another 5K selling tradelines (not my numbers, just an example). What would be the difference approx? You would have to pay FICA taxes on business income but not hobby income, correct? But also you would be able to claim QBI deduction (only 80% of business income is taxable) and open a SEP IRA, so that would offset some of the FICA payments.

Contributing to a SEP IRA or Solo 401k will not offset any FICA if you file a Sch C.



It would be hard to say.  It would depend partly on how much in business expenses you chose to deduct, as well as your overall AGI (Social Security taxes end at a certain amount of earned income).

But roughly 15.3% of net income for SE taxes minus 7.65% of net income for SE tax adjustment minus 20% of QBI.  So probably in most cases worth it to report as business income.

Here are some calculations to consider.  Someone please chime in with any errors you spot...

If we are in the 22% tax bracket and treat it as Hobby Income, it is just 22% tax (So $1,000 in tradelines would be $220 Federal Tax due) 

Now we will assume we are in the same 22% tax bracket and file as Sch C income, and we will assume no SEP IRA or Solo 401k contributions, and no Sch C expenses whatsoever:

SE Tax is at 15.3%, but it calculated on 92.35% of Sch C income, so 0.153*0.9235 = 14.13% TAX

The SE Tax deduction is 1/2 of this, and it is only a deduction, so here is that math:
0.1413 / 2 = .07065
0.07065 * 0.22 = 1.55% TAX SAVINGS

QBI, sec 199A 20% deduction is based on Sch C Income - SE Deduction, so here is that math:
0.20 * (1 - 0.07065) * 0.22 = 4.09% TAX SAVINGS

So that works out to 0.22 + 0.1413 - 0.0155 - 0.0409 = 30.49% Tax (So $1,000 in tradelines would be roughly $305 in Federal Taxes due)
« Last Edit: February 01, 2020, 09:46:45 AM by SilverAg47 »

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3843 on: February 01, 2020, 02:27:49 PM »
After a 4 month dry spell with a new card after my old one got shut down, I just had two users added this week with the old company. Barclay card, opened in 2016, 20.5k limit (I moved a limit from another card with a quick phone call to get to the next tier of payment).

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3844 on: February 03, 2020, 09:13:13 AM »
What strategy do some of you use for removing users? I know the companies tell you to remove them after three months or so, but aren't you less likely to get shut down if you leave them longer? Of course, this probably delays payouts and makes for fewer users, but better to not lose the cards. I'm just wary after losing a card years ago.

I've got a user right now who has been on my card for a little over four months. I'm still hesitant to remove.

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3845 on: February 03, 2020, 10:40:09 AM »
I remove them from a couple days to a couple weeks after told to do so (old company uses a list, new company sends email.....when they don't forget).  I had one on Chase where I removed the card from use and the AU was on there for over a year.  Just remember that you won't get added AUs if your number of slots for AUs have not been removed.

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3846 on: February 04, 2020, 07:47:20 AM »
I remove them when they tell me. What (I think) got me busted was that someone cancelled their order, so I added and removed that person within a couple of days. If another cancellation happens I will keep them for a couple of cycles like a normal order.

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3847 on: February 04, 2020, 09:18:33 AM »
Unfortunately I gave up on this gig some time ago. Discover closed my account back in 2018 and they would never give me any information about exactly why, but AUs is the only thing I can fathom. I haven't had any luck with AUs on my Citi card. They never seem to report properly despite following the instructions to call in and add SSN and so on.

Has anyone had any luck opening a new Discover card after getting an account closed? I would like to get another one but not sure how long I should wait or if they will ever give me another one.

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3848 on: February 04, 2020, 03:21:39 PM »
Unfortunately I gave up on this gig some time ago. Discover closed my account back in 2018 and they would never give me any information about exactly why, but AUs is the only thing I can fathom. I haven't had any luck with AUs on my Citi card. They never seem to report properly despite following the instructions to call in and add SSN and so on.

Has anyone had any luck opening a new Discover card after getting an account closed? I would like to get another one but not sure how long I should wait or if they will ever give me another one.

I think you can sue them for canceling without telling you.  You'll have to search this thread but I know some ppl got a cash settlement from discover for this very reason.  Somone on here is an attorney and handled it for them.

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Re: Selling Tradelines / Piggybacking Part II: $1000+/hr, 20-40k/yr. Side Gig
« Reply #3849 on: February 04, 2020, 03:31:58 PM »
Unfortunately I gave up on this gig some time ago. Discover closed my account back in 2018 and they would never give me any information about exactly why, but AUs is the only thing I can fathom. I haven't had any luck with AUs on my Citi card. They never seem to report properly despite following the instructions to call in and add SSN and so on.

Has anyone had any luck opening a new Discover card after getting an account closed? I would like to get another one but not sure how long I should wait or if they will ever give me another one.

I think you can sue them for canceling without telling you.  You'll have to search this thread but I know some ppl got a cash settlement from discover for this very reason.  Somone on here is an attorney and handled it for them.

@PointsLawyer.