10-17-2023 06:02 AM
I have a question... since I've been buying lately, but won't be selling until next year...
Basically want to know if I can use the thrift store receipts that I have for this year and last year (2022 & 2023), and use them next year on the items I actually sell ( and yes, I understand that I can't write off what I don't end up selling).... However, can I use the previous years receipts for the ones I do sell in the following year?.... or are COG receipts only valid to use in the year the item was actually purchased?
Example:
If someone buys 20 items in December 2023, at the cost of $1,000...
But waits to list everything until January 2024, and all 20 items sell by February/ March for $3,000
Is that $1,000 COG receipt valid to offset the sellers expenses, or is the receipt trash now?
Anyways, if you have a simplified and direct answer to the question, could you please share it here, ....
I'm not that sharp, so simple answers will be more appreciated...or even a link to a simple, but correct answer...
And yes, I understand that I should get an accountant to help, and I eventually will... but ... I'd like a general idea before I go thru the expense of confirming the info ...
Thank you in advance for any help that seasoned sellers can provide
Solved! Go to Best Answer
10-17-2023 06:40 AM
Hang on to the receipts, even if you don't sell the items until 2025. I buy thousands in inventory, sometimes it takes a year or 2 to sell, then I write off the year it sells. I just hate the end of the year when I have to count up inventory not sold, its money spent but can't write off lol
10-17-2023 06:10 AM
Yes, keep the receipts for inventory. They'll be good for as long as needed (maybe even years)
10-17-2023 06:11 AM
I don’t think it matters when the items were purchased, it’s best to hang onto receipts for reference when it comes time to file your taxes.
Without knowing what price range your items are. It’s best to keep those receipts handy since eBay has been known to require sellers to show proof of purchase on high value items.
10-17-2023 06:40 AM
Hang on to the receipts, even if you don't sell the items until 2025. I buy thousands in inventory, sometimes it takes a year or 2 to sell, then I write off the year it sells. I just hate the end of the year when I have to count up inventory not sold, its money spent but can't write off lol
10-17-2023 09:15 AM
Doesn't matter when you purchased items. You only deduct COGS when item SELLS.
To better help you understand all the bookkeeping involved I suggest you read a book on "taxes and bookkeeping for small business". EBAY is no different from any small business.
Filing your business taxes can be very confusing and overwhelming. I strongly urge you to use a CPA (they can help you get every deduction and save you money). Once you have a good understanding of what is required...then you can do it yourself.
10-20-2023 12:59 PM
Thank you for such a clear and concise answer 😊... And thou everyone that answered is appreciated, and seemed to come to the same basic answer as you ... since I could only pick 1 as 'most helpful' I choose yours because not only did you make me feel assured that you know what you're talking about by referencing your own experience, but you elevated it with your ending statement which made you seem relatable and down to earth...
...so thank you again
~Crystaline
10-20-2023 01:01 PM
This was a fantastic answer too!... Thank you for the additional info, I will definitely look for that book!
10-20-2023 01:12 PM
Most of the answers on this thread are applicable when the business is using accrual accounting.
Ask your tax professional if you qualify for cash accounting where your inventory purchases may be exspensed as supplies. You must be under $25 million in sales.
With cash accounting you can deduct that money this year.
Those of us who have been in business a long time precede the change in law which allow cash accounting.
10-20-2023 01:18 PM
Thank you!... This was the most simple and direct answer, which is exactly what I had asked for...
I almost chose this as best answer, however, the seller that explained their experience made me feel assured that the answer was definitively correct (...plus, I noticed they have almost 20,000 sold, which further made me confident in their answer)...
Thank you so much for your input too... its so appreciated!
10-20-2023 01:24 PM
Wow, thats interesting...
I'll need to google what I think that means (accrual accounting)...
but with new cash accounting laws, hopefully it won't confuse me...
... but thank you for the new keywords I can look up... they're very helpful!