Where to report ebay expenses and costs on schedule C for cash basis accounting?
Hello all,
Last year was my first to tip over the threshold for reporting income, and my first 1099K. I already report via Schedule C for my current business. I bought a collection of items earlier last year, and sold all, and some other items over the year. I use cash accounting for my small business. Do I report this as cost of goods sold? Or should it be reported as misc expenses instead? I have always been under the impression that cogs was only for accrual accounting, and you can't switch back and forth without special permission?
As to ebay returns and expenses, would they be reported as misc expenses as well?
Greatly appreciate any guidance here.
2 comments
tarotfindsandmore
·1 year agoYour cost of goods is your cost of goods, not misc expenses. It's the only appropriate category for that expense, especially with the cash method. It sounds like you've inverted the rules here. The accrual method is where you might use "misc expenses" associated with holding inventory that's been purchased that year but only partially sold off.
Side note: The threshold for the cash method was 25 million the last time I looked so very, very few resellers on eBay even need to consider the accrual method. The average full time seller on the platform is making about 60K (last I looked, this could have come down since that time).
kensgiftshop
·1 year agoIt doesn't matter if you receive a 1099K or not, you're supposed to be reporting your income.