Taxes Guidance.

[alex.j.staples]

I was ignorant when I started dropping. I never thought it would amount to much. Turns out I did pretty well. I didn't pay much attention to emails from PayPal or eBay, I just filled orders. Turns out PayPal sent me a 1099k for the 2015 year. Obviously I found out about this due to a letter I got from the IRS. The income reported was in the area of $110K. So I sweat for 2 weeks searching for every single receipt I could find. And I found it all. I found all the receipts (email order confirmations) which were to fulfil my eBay orders. I also have all the receipts from eBay and PayPal for their fees. Along with returned orders, and tools I spent money on to learn and develop my knowledge of the business. What other expenses can I write off? How do I fill out the schedule c form for this? I believe there is a home office deduction. Can I deduct a portion of my rent since I did have an "office" that was business only. Do I deduct a portion of my utility bills?? I'm really confused by all the forms. I can't afford to spend $500 to have a tax guy do it... Anyone help?

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[dallis]

You need a tax guy. We're a bunch of faceless unknown people on the internet, not attorneys or accountants, ( though some of us may be, you never know ).

I do know that if you claim a home office you put yourself in a high-audit category, and who needs that?

I will say that a potential 110K tax exposure requires immediate professional help. This could ruin your entire life, and $500 is a small price to pay to make it go away.

Tax liens NEVER go away and cannot be discharged via bankruptcy. Get this taken care of asap.

[empirestate]

Originally Posted by alex.j.staples

I was ignorant when I started dropping. I never thought it would amount to much. Turns out I did pretty well. I didn't pay much attention to emails from PayPal or eBay, I just filled orders. Turns out PayPal sent me a 1099k for the 2015 year. Obviously I found out about this due to a letter I got from the IRS. The income reported was in the area of $110K. So I sweat for 2 weeks searching for every single receipt I could find. And I found it all. I found all the receipts (email order confirmations) which were to fulfil my eBay orders. I also have all the receipts from eBay and PayPal for their fees. Along with returned orders, and tools I spent money on to learn and develop my knowledge of the business. What other expenses can I write off? How do I fill out the schedule c form for this? I believe there is a home office deduction. Can I deduct a portion of my rent since I did have an "office" that was business only. Do I deduct a portion of my utility bills?? I'm really confused by all the forms. I can't afford to spend $500 to have a tax guy do it... Anyone help?

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I just don't believe that you cannot afford when you made $110k, what a BS..

[123]

You really should invest in an accountant, it can save you a lot of money and problems in the long run

But if you want to cheap out, can try something like turbotax it can walk you through some stuff

[dallis]

I found that hard to believe too, but most people have trouble holding onto money, it slips through their fingers.

Particularly if they think they're never going to have to pay taxes on it.

[BaggaDonuts]

DIY is all good until you get audited. Then it can be WAY more expensive than the $500/yr to the tax guy.

In short you can deduct nearly any business-related expense. For you, that'd be ebay/pp fees, cost of drop-shipped merchandise at least. Home office when you are renting is iffy, not sure of the rules on that one.

[bettahman]

i claim everything on my taxes home gas car food ... long as you have reciepts in case your audited your fine. HOWEVER, i would get a professional local accountant to help. and they also can do the taxes as part of their service. an average is around 700 for books and taxes. you may even get a return. depends on what you decide to claim as business expenses

[vettefever17]

Originally Posted by alex.j.staples

I was ignorant when I started dropping. I never thought it would amount to much. Turns out I did pretty well. I didn't pay much attention to emails from PayPal or eBay, I just filled orders. Turns out PayPal sent me a 1099k for the 2015 year. Obviously I found out about this due to a letter I got from the IRS. The income reported was in the area of $110K. So I sweat for 2 weeks searching for every single receipt I could find. And I found it all. I found all the receipts (email order confirmations) which were to fulfil my eBay orders. I also have all the receipts from eBay and PayPal for their fees. Along with returned orders, and tools I spent money on to learn and develop my knowledge of the business. What other expenses can I write off? How do I fill out the schedule c form for this? I believe there is a home office deduction. Can I deduct a portion of my rent since I did have an "office" that was business only. Do I deduct a portion of my utility bills?? I'm really confused by all the forms. I can't afford to spend $500 to have a tax guy do it... Anyone help?

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As being an accountant myself, I would highly advise seeking professional help. But if you chose to take the cheaper path, Turbo tax is your best program for someone that doesnt know tax code. It will walk you through every step you need to take to file the return. Another very key element of this is the year of the return. Those are your guidelines. Tax law changes every year.

As for the amount the IRS is hitting you with. This is your receipt value, obviously. This number will tumble based on your profit margin. I highly suggest using paypals year totals. This document will show your ebay fees and cost in one document, alongside your fees from paypal. You can do some simple math with debits and credits and get your gross income then subtract your product cost from this. Remember, the document from paypal already includes your shipping cost via ebay cost totals. You can later deduct office space, but I would suggest reading very close to this rule. Dont over do it. The last factor of this is if you had any other filed income and taxes from a wage job. You can do medical, and all of the other deductions inside of the program.

In conclusion, take your time and reconcile the totals at least twice. They better add up. The IRS is going to audit you with an accountant. This guy WILL be looking for hard copies and numbers that add up, not word of mouth. Good luck.