Who should I talk for tax/business advice?

[radixfinds]

Hello! I've been an occasional seller on eBay for almost 20 years now- mostly selling items I had lying around the house, but have recently started selling things on more of a part-time basis for some side income where I am now buying inventory. I understand that you do not need a business license to sell on eBay, so with that, I wanted to see how my numbers were for a few months before I contemplated doing anything and opening one.

Lo and behold, I feel like it has been going well and I am turning enough profit to where I want to start considering my options. I know absolutely nothing about starting a business or any of the benefits of it. I know there are certain things you can write off as part of your expenses, but again, I do not know enough to comfortably do my taxes. I don't even know where to start and feel like I'm getting overwhelmed thinking about it. Do I go to a tax preparer? Do I go to a CPA? Do I go somewhere else? Should I go to a place like H&R Block, or should I find a more private place? Or like since I haven't opened a business license yet, what happens with the mileage I put on my car or the items I purchased for this? Can I claim these on my own taxes? These are things I don't know and questions I have. I don't know where to start and would appreciate any advice on how I can get moving on this. Thank you!!

[ckimodog]

@radixfinds 

The best advice and people to talk to concerning taxes, 1099s, etc. are people who are professionally trained in that business.  You'll get good advice here on this forum as there are a lot of knowledgeable people here, but I would go to those who do this for a living. Just my opinion and out look. 

Good luck what ever you decide. 

[rfmtm]

Whether you operate with a personal or business account as a sole proprietor you will need to file Schedule "C".  It only becomes more complicated if you create and file as any form of a corporation.

If you are operating like a business and buying inventory for resale, then yes you get to deduct all your expenses, cost of goods, postage, etc., and even for the use of your car and space used in your home.

Tax software like Turbo Tax Home & Business, or H&R Block Premium will guide you through this as a sole proprietor even as a novice, but if you have absolutely no idea what you are doing, best to talk to a tax advisor or accountant for guidance.

[12345jamesstamps]

I do H&R Block. They are good at doing a "profit and loss" in which you kinda want to break even using all your deductibles. You can claim a loss for a year or two when starting out so don't panic. After that you should claim profits. We assume a 1099K will be giving to us by eBay which you give to whoever does your taxes.

Keep all receipts and add them up...H&R Block just wants an itemized report on everything and then a total.

H&R doesn't keep your receipts or your itemized sheet on deductibles.

Deductibles can be a lot of things....monthly eBay fees, shipping fees, tape, boxes, wifi, and so on.

Printing labels...ink and paper. The list can be long. Are you buying a new computer this year to sell your stuff...that's a deductible. I do a lot of selling on my iPhone so that's a deductible...monthly bill. And so on.

I don't claim driving on my motorcycle....probably wouldn't be worth it. 

So, if you have any receipts on purchases of items purchased the years before that could also help...for me its buying stamps from sellers which I will use for they give me receipts of previous years.

Anything you "buy"...get a receipt.

The cap was $20,000 last year...and the year before....and we do not know what it will be this year.

Considering how Congress moves slow....just extended the nation budget by hours again....I am assuming the cap will not change. Although one needs to pay their taxes....we didn't get no 1099K for last year.

[nobody*s_perfect]

---

@radixfinds wrote: .... I know there are certain things you can write off as part of your expenses, but again, I do not know enough to comfortably do my taxes. ... Do I go to a tax preparer? Do I go to a CPA? Do I go somewhere else? Should I go to a place like H&R Block, or should I find a more private place? Or like since I haven't opened a business license yet, what happens with the mileage I put on my car or the items I purchased for this? Can I claim these on my own taxes?...

---

You can deduct your expenses (mileage, postage, etc.)  even if you don't have a "business license." IRS considers your eBay activity to be a business, rather than a hobby, if you're in it to make a profit.

https://www.irs.gov/newsroom/heres-what-taxpayers-need-to-know-about-paying-taxes-on-their-hobby-act...

You should start by reading some of the very helpful pages that the IRS themselves have put together, starting with Schedule C and its instructions.  This will prepare you to make better use of professional help, which usually charges by the hour.

Do NOT go to a generic place like H&R Block.  You need somebody with expertise for filing self-employed papers.

[ten_o_nine]

Since you have all the information, why not use TurboTax or some tax software like that. It seems your situation is not that complicated to hire a CPA.

[slippinjimmy]

Before you go to anyone  for advise you should do some homework to become familiar with the basics in terms of what type of records to keep, what tax filing requirements are, deductions available, basic types of business structures etc. etc. etc.

A good place to start is with the IRS

https://www.irs.gov/publications/p334

On that page are links to follow for detailed information on many topics

For most part-time sellers handling income tax reporting is actually pretty simple, one skill that is extremely helpful is a basic knowledge of Excel (or any type of spreadsheet program, OpenOffice being a good free alternative). With that ability you can use the data downloads eBay provides to track and summarize your numbers for tax reporting.