Going legit! How do you keep track?

[blacksheep4289]

/So I've been listing on ebay for two years or so. Nothing crazy just a few items here and there. My wife got a promotion, a raise equal to my income last year, and a free apartment. So we've placed the house for sale, I quit my job, and we moved. I plan to see about listing on ebay(and trying amazon also, any tips for that) full time. Plenty of thrift stores and garage sales to keep a steady flow of inventory. My question is what info do you keep for tax purposes? Do you keep a a receipt book with you and keep track of what you spend? Do you then transfer that info to a spreadsheet or is that what an accountant is for? Have you invested in one of those apps that keeps track of your mileage? Any pointers? Is an ebay store worth it? Is it worth spending $40 a month to sell on amazon?

 

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[galenrog]

In my opinion, which is worth what one pays for it, it that you should sit down with a CPA that specializes in home business. While you will likely will get some good advice here, you will have to separate it from the nonsense and claptrap that may also show up.

Time for more coffee.

 

[trdhrdr007]

Can't help you with Amazon & I'm really old school, but I've been in business of one sort or another most of my life. I'm semi-retired & this is a part time gig for me. I sell between $2-5000/month on eBay. That's 30-60 items. I keep a weekly Dome book (look it up on the web) & spend a couple minutes every day entering purchases/expenses. Takes about 5-10 minutes at the end of the week to add things up & move totals to the next page. I also keep a notebook for inventory & write down what I bought, where it came from, & how much I paid. Once a month I download my Paypal statement & spend a couple hours adding everything up, transferring totals into the Dome book, & updating my inventory notebook with what sold when & for how much.

I don't get into the home office expense deduction. I have a vehicle I only use for the business & keep track of mileage/expenses. I also deduct my cell phone. My other expenses include eBay/Paypal fees, office expenses(paper, ink, etc) & postage. At the end of the year I copy the last page of my Dome book, figure my miles driven, & calculate inventory on hand. I hand all that info to my book keeper & they prepare my taxes. Could do the taxes myself but I've got other things going on that are more complicated. I figure I spend about 3-4 hours monthly & an extra 3-4 hours at the end of the year compiling all the info. Could probably save some time with a computer program of some sort (& would need to if I did a lot more business) but this works for me.

 

[MackinawGirl]

I have been selling on eBay for several years, keep records and file business taxes. I use a monthly excel spreadsheet. My CPA at H&R block gave me information of what types of receipts to keep. Pretty much anything you can think of from purchase, sales, shipping, office supplies, packing supplies, mileage log (they have good apps on phones now for this), your internet cost, monthly store fees, advertising (business cards ect.), paypal and ebay fees, and anything else that pops up business related. I do it monthly and keep everything in an accordion file. I have done the tax prep myself but it is easier for my tax guy to do it. I don't have a huge business but usually do around 2-4k per month in gross sales and then have to minus all my costs from that. Make sure you save your information & receipts for 7 years like anything else in case of audit. I tried Amazon and I just didn't have any sense of comfortability there. It was really hard for me to list the types of things I sell. Amazon is better for new stock inventory in my opinion. Good Luck with your business.

 

[trdhrdr007]

I was at a thrift a few weeks back & saw a lady that was obviously buying for resale. We ended up talking about selling online in general & eBay in particular. She started telling me that she advises all her family/friends to sell on eBay. She had a bunch of reasons why but her main one was that "unless they change the law you don't have to pay taxes on the 1st $20,000 you make". I wanted to say something but learned long ago that you can't fix stupid.