Help with selling more than 200 items in a callendar year

[Primedot]

So, I have reached the limit of items i can sell in a year and now steam is asking me for my personal information if I want to sell more. It asks me if I'm a US citizen or if I'm not. Even though I don't live in the US, I have double nationality, and one of them is american. So technicaly I am and I'm not a US citizen. This means I have 2 passports and I also have a SSN. My question is: Will I get into any trouble if I write down the non-citizen form?

[Dr. Fronkensteen]

It goes by place of residence i believe. So wherever you primarily live would determine whether or not you have to fill out the tax info.

[76561198218426745]

My understanding is that regardless of where you live, if you have US citizenship you are required to select that option.

[Forcen]

I mean, just because you are citizen of another country doesn't negate the US citizenship? right?
You are a US citizen and that is probably the part that matters.

You can ask valve here: https://help.steampowered.com/en/wizard/HelpTaxForm

The United States Internal Revenue Service requires us to report gross sales for, and provide IRS Form 1099’s to, only those subscribers who are U.S. citizens or residents and who exceed 200 sales transactions in a calendar year and also exceed $20,000 in gross sales proceeds from those sales transactions in that same calendar year, from all of the subscriber's accounts. If you are a U.S. citizen or resident and exceed both of these thresholds, we will report the amount of gross sales to the IRS and provide you with Form 1099.

https://support.steampowered.com/kb_article.php?ref=6088-UDXM-7214

So as long as you don't earn more than 20 000 you should be fine. Probably? I'm not a tax professional..
Maybe ask a tax professional.

Just don't lie on the form and stay honest and it should all work out. Ask valve on that link.

[Washell]

If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.

https://www.irs.gov/individuals/international-taxpayers/u-s-citizens-and-resident-aliens-abroad

So yes, you could get into trouble.

[Primedot]

The thing is that it's asking me for my US adress if I did the US citizen form. So I guess I need to be censused in order to do that form.
Edit: Which I am not.

[Forcen]

Ask valve with that link.

I would guess you enter your current adress and all that and they check it and notice you are also a US citizen and ask for more info and act according to that info.

[Primedot]

Originally posted by Forcen:

Ask valve with that link.

I would guess you enter your current adress and all that and they check it and notice you are also a US citizen and ask for more info and act according to that info.

Will do thanks!

[Macenn]

This whole tax thing is beyond ridiculous. Steam wallet isn't real money. You can't make profit on Steam and then withdraw it. Does WoW or RuneScape ask you for tax information even though you can sell things on auction for "gold"? Didn't think so. Then why on earth would you pay taxes for selling things on Steam?

If you are publisher and Valve sends you money then ok, sure, then you should pay taxes. But if Valve doesn't send you money where does the tax come in? It's actually the other way around - you keep paying Valve even to be able to "sell" things on the market. Being able to sell things on Steam is just a gamey way of giving you a discount, nothing more.

[76561198218426745]

It is ridiculous, but then you have to blame the IRS. They consider the sale of digital goods to be taxable. Steam doesn't really have much of a say in the matter.

[Macenn]

Originally posted by habitualaction:

It is ridiculous, but then you have to blame the IRS. They consider the sale of digital goods to be taxable. Steam doesn't really have much of a say in the matter.

My point was that it's not a digital good if you don't get real money for it.
Buying/selling realestate in Monopoly is not taxable either.

[cSg|mc-Hotsauce]

Originally posted by Macenn:

...Does WoW or RuneScape ask you for tax information even though you can sell things on auction for "gold"? Didn't think so. Then why on earth would you pay taxes for selling things on Steam?

blizzard and jagex are not american companies.

valve is and is subject to american tax laws for operating their market. this includes users that sell digital goods from their market.

[Macenn]

Originally posted by cSg|mc-Hotsauce:

Originally posted by Macenn:

...Does WoW or RuneScape ask you for tax information even though you can sell things on auction for "gold"? Didn't think so. Then why on earth would you pay taxes for selling things on Steam?

blizzard and jagex are not american companies.

valve is and is subject to american tax laws for operating their market. this includes users that sell digital goods from their market.

:qr:

I see you can't be bothered to read the whole thread before posting a response.

For digital goods you are supposed to recieve "real money/currency" that you are able to use in real world. WoW and RuneScape - as of any other MMO, i named as example because they use game money and not because where their headquarters locate. Steam wallet cannot be considered as real money because you can't withdraw it and use it outside of Steam.

I give you very simple example why it's so:

Let's suppose you purchase 10 units of Steam Wallet and you use that to "buy" a game on Steam. Then you manage to drop a foil trading card that is worth let's say 100 Steam Wallet on the market. Now - can you withdraw the 100 unit of Steam Wallet? No. Because Valve is not a bank and Steam Wallet is not a real currency.

And you are not supposed to pay taxes on game currency no matter where you live or what citizenship you hold.

Steam can be many other things but first and foremost it's a game. You can even display it as your favourite game with play time on your profile.

[Macenn]

Originally posted by cSg|mc-Hotsauce:

IRS Virtual Currency Guidance : Virtual Currency Is Treated as Property for U.S. Federal Tax Purposes; General Rules for Property Transactions Apply
IR-2014-36, March. 25, 2014
WASHINGTON — The Internal Revenue Service today issued a notice providing answers to frequently asked questions (FAQs) on virtual currency, such as bitcoin. These FAQs provide basic information on the U.S. federal tax implications of transactions in, or transactions that use, virtual currency.
In some environments, virtual currency operates like “real” currency -- i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance -- but it does not have legal tender status in any jurisdiction.
The notice provides that virtual currency is treated as property for U.S. federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency. Among other things, this means that:
Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes.
Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply. Normally, payers must issue Form 1099.
The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.
A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.

https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidance

:qr:

Oh thank you. Now read again what you just posted and tell me if Steam Wallet qualifies as a virtual currency or not? Could you imagine Valve employees being paid in Steam Wallet? Lol.

[cSg|mc-Hotsauce]

the steam wallet is the currency on steam. you need it for market purposes.

it does not matter if you cant use it anywhere else. it is a virtual currency that you spend on games and items. you know, digital goods.

[Macenn]

Originally posted by cSg|mc-Hotsauce:

the steam wallet is the currency on steam. you need it for market purposes.

it does not matter if you can use it anywhere else. it is a virtual currency that you spend on games and items.

:qr:

No, it is not a virtual currency and it matters very much wether you can use it anywhere else or not because that very thing defines if it is virtual currency or not. If you can use it only in Steam then it is "game currency" like Monopoly money or WoW gold.