Magic Cards & Your Tax Returns: What You Need to Know

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.

The Shawshank Redemption: Andy Dufresne’s Questionable Tax Advice

The Shawshank Redemption is one of the most peculiarly loved films of all-time. Something about a clever man dreaming behind bars speaks to more people than I would’ve ever thought possible. But Rita Hayworth and I have one little question about a pivotal plot point: Was Andy Dufresne’s tax advice to the Captain Hadley bullshit?

Here’s how it goes: It is 1949, and atop a roof at the Shawshank Prison, Captain Hadley loudly groans that he has inherited $35,000 from his brother, but he is livid that the government is going to “take a big wet bite out of [his] ass” in taxes.