eBay

wta_27 · ‎03-06-2022

Hi all -

This is my first year selling on EBay… thx to all the cool people on here and their advice, I was able to make a few grand selling unwanted items after we moved this past summer.

I have come to ask for more advice because I’m a little confused and can’t find much help researching online…

I have an appointment with a CPA to help me with my taxes this year because again, I’m new to Ebay.

I’m trying to figure out what to bring to him for our appointment…

I kept receipts for my expenses (thermal printer, packing goods, etc).

I have no clue what my cost of goods sold is - I have a detailed notebook of things I sold and tried to guesstimate next to each item what I paid 15-25 years ago (I assume the CPA can help me with this issue though).

The biggest issue is I have not received a 1099 form, so I’m not sure what to bring to the CPA in terms of showing my profits.

Do I just go over my bank statements and add up all the eBay payouts I received up until Dec 31st?

Just want to do this right and report all of my income properly.

Thx for any guidance!

this*old*attic · ‎03-06-2022

You don’t need a 1099 (which is gross not profit anyway).

The IRS will take good faith estimates of cost of old items.

Its pretty simple:

Cost of goods

Shipping costs (including supplies)

Ebay fees

Add/total

Download reports from all the various places (i.e. I keep forgetting to change my postage payments away from PayPal)

Basically, it’s just a money in/money out math problem.

Everything customers paid you minus all the costs that went out

And A+ for tracking printer ink and such. I never bothered.

m60driver · ‎03-06-2022

Last year I did not keep good records. But I know what my approximate net profit margins are so I used that as a starting point and worked backwards. I know that my base Ebay fees are about 20%. And I know that for what I sell, and I use "free shipping", I know about what my shipping cost percentage is to gross sales. Anyways using all these honest approximations I was able to come up with an honest estimate for net and costs and distribute those costs into various expense categories. I did not bother with a CPA as they quoted me in the $400-500 range. So I just spent an extra $40 to upgrade my TurboTax to the home business version. Not wanting to have to deal with the IRS I probably overestimated my net profits slightly. This year I am keeping good records for all sales and expenses.

jimw1776 · ‎03-06-2022

You said, "I keep forgetting to change my postage payments away from PayPal" Why?

Using managed payments, but I'm still using postage from PayPal. It's easy, it's already set up...and I never thought of changing.

Is there an advantage to not using PayPal for postage?

Thanks

silverstatetreasureboxes · ‎03-06-2022

@this*old*attic very good simple advice. @wta_27 stay away from gas related deductions ( small can of worms) you should have no problem bringing that 2k amount down to a small taxable amount. Also for next year, if you source at fleas, yard sales and some thrift shops you probably won't get receipts. Keep a small pad/ pen in your car and write items down with dates purchased.

this*old*attic · ‎03-06-2022

Just everything in one place, less pulling info from different places.

wta_27 · ‎03-06-2022

USPS and UPS are like a mile away from me, so I’m lucky in that sense - so won’t be doing any gas expenses.

I am doing quite well selling a big storage room of our old stuff, but once I sell it all off I won’t be selling much anymore on Ebay (have enjoyed it though).

Thx for the advice everyone -

tryno2 · ‎03-06-2022

The mileage is deductible. That's the best way to handle car expense, is use the IRS standard mileage rate. Trying to track gas, repairs, insurance, oil changes etc and split it between personal and business is big problem. Using the standard mileage rate is simple. Just track your business miles.

nobody*s_perfect · ‎03-06-2022

@wta_27 wrote:
USPS and UPS are like a mile away from me, so I’m lucky in that sense - so won’t be doing any gas expenses.... -

The IRS mileage deduction is over 50 cents per mile, so you get to deduct over $1 for each trip you made to the PO.

this*old*attic · ‎03-06-2022

Yes, but you can only count straight shot trips.

In theory, at least, you can’t count up mileage for any trips on the way to/from work, or sandwiched in a mix of errands.

Terribly nickel and dime, compared to the effort to track it.

The juice needs to be worth the squeeze.

silverstatetreasureboxes · ‎03-06-2022

@tryno2 Agree but OP has not tracked his mileage and he is so small in sales that it wouldn't be sensible to deduct. He'll be fine just deducting his shipping, supplies and COG.

caldreamer · ‎03-06-2022

IRS requires you to report GROSS SALES (purchase price + shipping income) total amount that you received from the customer. Not "net amount" that you receive in Payout after fees deducted. Go to PAYMENTS, REPORTS (select time period and download TRANSACTION REPORT). You will need to save this as EXCEL spreadsheet.

Because shipping is included in your GROSS SALES when you are deduct expenses include "actual amount" it costs to print shipping labels.

You also need to provide your accountant with beginning and ending inventory. This is your "costs of goods" that you purchased to sell. You need to assign inventory# for every item you list for sale. When that item sell...you subtract "costs of goods" for that particular item.

Your accountant can explain exactly how to keep good records.

katzrul15 · ‎03-06-2022

@silverstatetreasureboxes wrote:
@tryno2 Agree but OP has not tracked his mileage and he is so small in sales that it wouldn't be sensible to deduct. He'll be fine just deducting his shipping, supplies and COG.

Yes it would. And we track every mile - there is an app on my phone and we download the report each month.

And you can deduct mileage from your home to the PO while running errands. Mileage to the PO is deductible. The continued mileage to the next errand is not. It does add up over the course of the year, especially during resourcing, etc.

We never deduct meals, etc. Mileage yes - our CPA gives us a list of items to track. Mileage is in that top 5 list. Need to be able to verify it via a log. Many free phone apps today-easy to use! Great the OP tracked it!

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tryno2 · ‎03-06-2022

silverstatetreasureboxes, you are probably right but we don't know enough about his overall tax situation to know that answer. We know he/she made "a few grand". Now few has a different meaning to different people. To a person making millions a year, a few might be 100,000. To some making 50,000, then 2,000 might be a few. We just don't know. We also don't know if they have other income or expenses. Tracking the mileage is such a simple thing, they need to start thinking about it now.