I was going to title this article about taxes something more fantastical, like “How to Cast Magic Cards On Your Taxes” or something really cringey that would force you to quietly deride my incorrect usage of various MTG terminology. But taxes are no laughing matter, and the IRS has recently turned an eye to the hobby/trade.
Yes, I’m sorry to say that thanks to a booming baseball card market, NFTs, and other TCGs, the IRS latently figured out that there was a segment of earnings eluding their taxy clutches. As a result, most MTG sellers are going to be required to report card sales on their Individual Income Tax Returns for the first time ever. Naturally, this extends to other TCG and sporting card transactions–I’m merely using Magic: The Gathering as our primary example. Because MTG rocks.
So let’s take a look at what you need to know and how to move forward so you stay on the IRS happy list and avoid paying more than you have to.
DISCLAIMER: First, please remember: I am not your legal or tax representative, and this should not be considered official tax advice. It’s merely a conversation about tax strategies. For advice, guidance, and representation, please seek out a local trusted tax professional. Not one of those pop-up outfits in a strip mall either, spend a little extra coin and do it properly.
What Changed With 2022 Taxes?
Let’s talk MTG taxes! So you’ve sold some cards over the past year, just as you have year over year and nothing has ever come of it tax-wise. After all, seasoned sellers could tell you that Third Party Settlement Organizations (TPSOs) were only required to report sales over $20,000 in a single calendar year to the IRS (or if you had more than 200 transactions). If you tipped either threshold, you would have received a 1099-K form and you’d be under the gaze of the IRS.Continue reading “Magic Cards & Your Tax Returns: What You Need to Know”