Amy Gale
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amygale@amygale.com
212-787-5971
“Don’t Forget to File Your Taxes”
AntiqueWeek 42 (April 12, 2010)
Many years ago a dealer told me, “I find that when you pay taxes you have less money.” True words I reflect upon
while tackling a stack of W-2 and 1099-Misc forms.
I’m filing a little late this year because it was necessary to issue a revised W-2. The original had not included my
flea market wages. No kidding, I thought. Consider how the money was made: Every weekend, we showed up at
the market with boxes of bric-a-brac. The bric-a-brac was converted to money that was used to pay for the space,
van, and wages. The profit was deposited in the petty cash box and disbursed to cover miscellaneous daily
expenses. Does the IRS really care about any of this? Guess what? They do. They care about all money, even the
soiled fives and tens that don’t get deposited in the bank.
The revision didn’t cost me anything because it was my boss who paid the payroll taxes. But even before that was
decided, I wasn’t too upset. I like working for a company that is in compliance with state and federal tax codes.
I just hope the other flea market vendors don’t hear about this. It was bad enough when they found out that my
job came with health benefits. Well, la dee dah. I didn’t think I’d ever live that one down. As for payroll taxes,
they’re at odds with the can’t-be-bothered business practices of many in the antiques trade. For every dealer who
pays his taxes, maintains good credit, and attends the occasional Rotary meeting, there are probably a dozen who
live in the shadows, running a business with no official existence.
Here’s a typical scenario: You see the advertisement for an outdoor antiques show. You show up with a van load
of stuff and spread it out on the rented tables. A few hours later, the promoter’s assistant comes by to collect the
booth rent. You pay cash as do the other dealers. In an idle moment, you might multiply that amount by the
number of dealers. You might even try to guess what the farmer is charging for his muddy field. That’s a lot of
money changing hands. Better not ask if it’s all getting reported to the IRS. In exchange there will be no questions
about your sales tax reporting. You are up to date with your quarterly filing, right?
There are incentives to stay on track in the form of tax write-offs. Taking advantage of them is straightforward if
you have prior business experience or grew up in the antiques trade. In many cases, though, the dealer doesn’t
know how to organize the financial side of the business. Besides, the paperwork doesn’t seem very important,
when it’s a one-man, spare-bedroom operation. It’s when the business takes off that there are problems. Start filing
now and you’re like a UFO on a flight controller’s radar screen. The 20,000 positive feedbacks on an eBay account
opened in 1999 are no longer such a great thing.
Put it off too long, though, and you may end up like the dealer I worked for whose haphazard bookkeeping caught
up with him. He’d gone off the grid years ago. He had a warehouse filled with inventory, but his financial
planning was very informal. Ditto his human resources policy; most employees were illegal immigrants from
Mexico. There were menacing letters from the IRS. He could not turn to anyone for advice because he was
surrounded by people whose finances were just as rackety. He spent most of the day driving around in his truck.
He avoided his office, which was filled with cartons of receipts and time cards.
We were paid by check on Friday. I wondered about those checks when it came time to do my taxes. Is it possible
to be paid by a non-existent business? Does that mean I don’t exist? Such are the metaphysics of tax evasion. The
simplest thing would have been to ask, but I hadn’t worked there in months. My departure was abrupt and
acrimonious. That, in my experience, is the biggest problem with these dealers. Their commitment to the staff
doesn’t extend past the weekly paycheck, and even that is uncertain. In this case, the Mexicans cashed their checks
at the dealer’s bank. Sometimes they came back empty handed and that was the signal that we’d all have to wait
until the latest financial crisis had been patched up.
It reminds me of the Pirandello novel about the man who fakes his death to escape an unhappy marriage. His new
life is just as isolated because, officially, he does not exist. He cannot, for example, work or fall in love. If Pirandello
were writing today, he might include getting health insurance. It’s pretty hard if you are working at a non-existent
business. That was the case of one young woman, whose first job was at a dodgy local auction house. Every week
she was paid in cash. She didn’t mind that, but she did want health insurance. To buy an individual policy she
was told that she would need a letter of employment on company letterhead from the auction house. The response
to that simple request: What letterhead? What auction house?
There tends to be fast turnover at these places. The ones who stick around are often themselves in hiding. They do
not have a bank account, and their tax situation is a subject you really don’t want to go into. Instead, you find
yourself saying things like, “If you had ID, you could go to a good check cashing place.”
Of course, cash flow can be a problem even for seemingly stable businesses. One reason 2009 was a good year is
because I did not have to threaten to sue for non-payment or squat in anyone’s office. That’s the low point: You
push your way in and dump down in a chair. It helps to bring a book on these occasions, so you have something to
do while waiting for the check to be cut. The one time I did that was for a dealer who was punctilious about
making me fill out a W-9 form. It was proof that just because there’s a CPA on retainer, it doesn’t mean you’re
getting paid any time soon. Still, I think you’re increasing your chances.
Pay your taxes. The deadline is April 15. Sure, you’ll have less money but you’ll also have fewer other problems.
