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Tax advice
 

How should I calculate up sales from EBay and PayPal? I sell on eBay and a eccommerce website that only takes PayPal as payment. it is under $20,000 for the 1099k form. I am wondering do I add up all the sales on eBay without fees then put eBay/PayPal fees as expenses? And For my website the gross income is added up I put that down then add PayPal fees to expenses am I right on this?

Also I heard you can just add up all the deposits in your bank accounts but that doesn’t seem like the right way to do it if you were to be audited.

By the way I did file for extension so I have time to file this just trying to get it right.

Re: Tax advice
 

Money in - money out = profit.

And then there all off of your deductions.

Re: Tax advice
 

We're not accountants, go to a profession, BUT:

Deposits won't be good enough, they'll want more granular data. Got to have all records, EB, PP and everything else down to the penny.

You can try to use one of the out of the box programs tax programs will work for you, they'll download your data and classify it by category.

I suggest you add up all the revenue, subtract all the expenses, and what's left is the profit. Whether you get a 1099 or not, you still pay taxes on the profit. :)

Re: Tax advice
 

I suggest you watch some very simple youtube videos on basic accounting for small business and how to fill out 1040 / 1040 C. 1040 C will be the form you use for your business profit / loss and like others have said it will require more granular data such as your COG's (Cost of Goods sold), other expenses, etc. Everything required will be shown on the 1040 C sheet for business as a sole prop.

For calculating profits for goods sold are basically:
Revenue - expenses (COG's) = profit


Any expense you incur to sell a product such as paypal / ebay fees, shipping/transporation fees, etc can be added up as a COG.

After you have your gross profit you can deduct other business expenses such as rent, vehicle costs, internet, phone, etc.

Im not an accountant.

Re: Tax advice
 

Thanks for all the answers I spent the time today to calculate most of it up. I was stuck on how to get all the sales from eBay because you can’t get them for the full year so I went to PayPal and it has everything I needed there in the statements.

Does anyone know if I have to include refund transactions? cause I just left them out don’t seem like it would matter but I can always go back an add them if it’s required.

I figure it’s not worth paying accountant for the amount I made. Something like TurboTax program maybe.

Re: Tax advice
 

A refund/return is an expense. It's a positive entry when credited/sold, a negative when debited/refunded.

It will zero out except for the portion of the PP charge that is never refunded, I think it's $.30..., and shipping charges both ways, which you probably can't recover. You'll need to account for them somehow, because they're a loss.

There may also be a factor for loss of value of the product if it was/is defective or damaged or is no longer sellable as new. This is often less easy to determine.

Example:

Widget: +$10 gross revenue
Outbound Shipping: -$2.69 = shipping expense
EB/PP Fees: -$1.66 = cost of sale

+10-2.69-1.66 = +5.65 Profit

Refund: -$10
Return Shipping: -$2.69
EB/PP Fees Refund: +$1.36 (1.66 - .30 unrecoverable PP fee )
+5.65-10+1.36-2.69= -$5.68 ( loss on sale )

This offsets $5.68 of profit, so it's of value to you, it's 5.68 of money you won't pay taxes of 21-33% on.

I think I did this correctly, it's 4AM, you should be able to get the general idea.

Re: Tax advice
 

TL;DR, lol.

If it's an expense it should be deducted. Refunds are expenses. :thumb:

Re: Tax advice
 

Stealth Guide is a tax deductible business expense :clap:

Re: Tax advice
 

Alright I appreciate all the info, I understand now.