Tax reporting question

[acreech41311]

Got a question for seasoned sellers, this is the first year that I have actually made any real money on ebay with items that I have bought specifically to sell, in the past its just been selling my old stuff randomly or a few things I'd pick up cheap and resell, typically less than $1000 a year coming in and probably less than $200 being actual profit.

This year is different since Im actually making money and will need to file it on my taxes, I've kept all of my reciepts from purchasing my inventory which I will deduct the cost of that from the payments I've received in paypal to get my actual profit, question is how do you guys handle postage?

When I ran a sales report in paypal it has all my postage on it as well (payments to USPS), I offer free shipping on probably 99% of my items so I'm the one paying the postage, do you deduct this from your profit as well as an expense or do you only deduct the cost of your inventory when filing?

[Artann]

Profit=Total Revenue - Total Costs
Total Costs = EVERYTHING you spent that is related to the business transaction, even including the gas that you used to take the package to the USPS location, time that you spent in the car driving there, parking fees if any and of course the postage fees.

[JamesNorth101]

This is a question to put to your accountant. They will be able to tell you what is and what isnt tax deductible.

[Sandy D]

Go to a book keeper or accountant and let them take care of your taxes for you.

There are many books, ebooks and videos on what is deductible and what is not.

Do both, contact a professional and learn yourself how to run a business and follow the laws of taxes, deductions etc.

It is almost essential if you are going to run a business to know yourself what your benefits etc are so you can take full advantage of the laws that actually help you.

Pay your taxes and follow the laws. Hire someone to advise you. Learn on your own for your own benefit and knowledge.

[GreenBean]

check out the IRS site

Internal Revenue Service

Make sure you find an accountant to help you work out exactly what to do for the first years of selling full time.

Aim to not short change yourself because you do not know what your (correct) deductions are.

Good Luck