I've been googling and reading up on taxes for small businesses in relation to reselling and found some things I thought worth sharing.
This recent article has some links, tips and tools some of which are free. One that I think sounds cool is an app for your phone to track deductions such as mileage as they are happening. Its called Deductr. There is a free version and a premium pay for use version. I think I might try it out.
I'd also recommend the comments section of this podcast over at ebay Scavengers where discussion turned to income taxes. There is a lot of information contained within. The podcast itself was not on taxes but a good listen.
Some blog posts that tackled the subject recently...
- Van at Thriftcore blogs about her methods and commentors chime in with their experiences
- Another good blogpost on the topic at She Thrifts She Scores. See the comments as well.
- And another good one from The Resale Thrifter. Thanks goes to Lorraine for that.
I must admit that my methods so far are the opposite of helpful so I'll just keep them to myself. Change is in the wind though as my business grows I want to become more organized. It seems like this topic would provide a good business opportunity for an accountant. Write an e guide on taxes and ebay (or amazon or easy) business. They could even sell it on ebay!
If you don't finish in time here is a link to how to file an extension. This gives you 6 additional months.
The best info I found for ebay sellers is from The Resale Thrifter. Jessica no longer posts, but the info is still there. It helped me tremendously and my tax preparer was impressed with how I compiled all my info. Here is the kink:
ReplyDeletehttp://theresalethrifter.blogspot.com/p/income-tax-information.html
Thanks Lorraine! I used to read and enjoy Jessica's blog. I will add that link to my list.
DeleteI stay pretty organized with my inventory purchases and sales and deductions, but I'm pretty old school with my methods. I keep a ledger that I reconcile each month. My brother is a CPA, so he handles my taxes- thank God! :)
ReplyDeleteOld school is great. Whatever it takes to get it done. That's great that your brother is a CPA. Any tips you've gained from him?
DeleteJust one you probably already know- save EVERY receipt :)
DeleteYes. Very important. Luckily I'm a bit of a hoarder so keeping the receipts comes naturally LOL. Now I need to start recording what I paid for each item. Do you do it that way, keeping track of purchase price for each item and price you sold it for?
DeleteYes, I wasn't very good at this when I first started, but now, whenever I bring new inventory home, I jot down in my ledger what it is, what I paid for it, and what I'm listing it for. Then, whenever it sells, I go back and add what it sold for.
ReplyDeleteThanks for sharing your experience Kim. I'm seeing that filing business taxes doesn't have to be a scary monster, now an audit on the other hand…GAhhhhhhh!!!!
ReplyDeleteI'm so thankful to have an accountant. I use the free version of Outright on Ebay. I sort my thrift receipts every month in long envelopes which also helps. I use to wait until February to do all of this and it took forever! But now it takes just about an hour a month and it makes tax time so much easier.
ReplyDeleteOnce a month sounds good. I need to get in that habit. Once a year when my receipts were scattered throughout the house was a little…..crazy.
Deletei made an excel sheet to track all of my sales this year because i was not so good about writing it down last year. i keep a running inventory and delete items as they sell as well and it has been working well for me so far
ReplyDeleteThanks for the tip Megan. I'm going to try that too.
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