Resold Those Taylor Swift Tickets at a Profit? You May Have a Tax Bill to Contend With

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Reselling Taylor Swift tickets may have made more sense than attending a show. Read on to see how that might impact your taxes. 

Taylor Swift’s Eras Tour was one of the most popular concert tours of the year, with fans clamoring to go so much that they were willing to pay a serious premium to snag a ticket. The average price of a Taylor Swift ticket during the Eras Tour was $253.56, according to Pollstar. But the average price of a resold ticket was a whopping $2,183, according to resale research site TicketIQ.

If you were lucky enough to snag Taylor Swift tickets, you may have decided to forgo attending the concert and instead walk away with a giant profit. But you should be aware that that could end up causing you a bit of a tax filing headache.

The IRS gets a piece of all earnings

Whenever you earn money, whether it’s through a salaried position, a side hustle, or interest in a savings account, the IRS is entitled to a portion of it. The problem, though, is that while salaried wages typically have taxes withheld, most other types of income don’t.

For example, let’s say you’re a salaried employee who gets a paycheck two times a month. The amount of your paycheck generally represents your net pay, which is wages after taxes are removed.

By contrast, let’s say you do freelance web design work on the side. Any money you earn from that gig will represent full, untaxed earnings. From there, it’s up to you to set aside money for your tax bill and to pay the IRS as you earn.

READ MORE: Best Tax Software

Similarly, when you profit from selling concert tickets at a higher price than what you paid for them, you’re on the hook for taxes on that profit. So if you paid, say, $250 for Taylor Swift tickets but sold them for $2,250, you owe the IRS taxes on that $2,000 profit. And you’ll need to make sure to set aside a portion of that profit to fulfill that tax obligation.

How will the IRS know about your profit?

So that’s the tricky part. If you were paid cash for your tickets and there’s no paper trail, it might be difficult for the IRS to determine that those tickets were sold. It’s not as if an agent tracked your online ticket purchase and then followed you the night of the concert to make sure you actually attended yourself.

But while you might technically be able to get away with selling concert tickets at a profit without the IRS knowing, it’s against the rules and a risk you may not want to take. It’s similar to people who work side hustles and get paid in cash. Technically, it may be possible to get away with not reporting that income in its entirety. In practice, that’s illegal, and it’s frankly not smart, because the penalties for underreporting income could be substantial if the IRS finds out.

Also, if there’s a record of your ticket sale, like a Venmo transaction, then that’s something the IRS might come across during an audit. It’s true that the IRS has delayed new 1099 reporting rules that would’ve otherwise impacted Venmo account holders for 2023. But to be clear, all the IRS did was delay a rule related to the requirement on Venmo’s part to issue 1099 forms. The rules of reporting and paying taxes on income have always been the same — when you earn money, you have to pay a portion of it in taxes.

As such, if you sold Taylor Swift tickets, or any concert tickets, at a profit in 2023, talk to an accountant about figuring out your associated tax bill. And if you’re someone who earns income regularly that isn’t taxed immediately, such as from a side hustle or full-time freelance business, it’s a good idea to enlist the help of an accountant to help you set up estimated tax payments during the year.

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