Tax help for 1st year seller

[Deleted]

Feb -  Dec 2014 was my first year selling on ebay.  I have no idea how to incorporate all my ebay related stuff into filing my taxes. We usually have taxes filed by now since we need to file taxes before filing the FAFSA for financial aid for our 2 kids in college.  But, I'm overwhelmed and not sure where to start. Can someone point me in the right direction?  I need the equivalent of ebay taxes for dummies!

I have kept pretty good records of everything I bought and have most of my receipts.  I started out the first 7 months writing everything down in a notebook then in August had my dd create a basic excell spreadsheet where I've entered each item, cost paid, where purchased, date listed and date / price sold.  I just finished the tedious task of entering all the stuff from the paper notebook into the spreadsheet.

I don't have price sold on all items.... is there a way to go back and find that on ebay?  I only see my solds for the past 3 months.
 Also how do I go back and find FVF and Paypal fees and actual shipping paid?
 Is there any place where that info is all together or am I going to have to go back through my statements page by page to find all that info?  I didn't sell nearly enough to get the 1099 form.

What else besides goods aquired cost and fees do I need to know? What forms do I need to fill out?  DH usually does our taxes using Turbo Tax.  He is getting to the point of not being very happy with me because I need to figure out the ebay tax stuff. And, I don't want to hurt my kids financial aid because we didn't get the FAFSA filed in time.  Between the inventory purchases, supplies, ect. of getting started, I don't think the overall income generated by ebay will be much this year but I don't want to do something wrong and risk an audit.  Yikes!  Any help or pointing me in the right direction would be really appreciated (before my husband and kids kill me, lol).

[bettyblackbent]

I'll be back later, but first of all, you do NOT need records on each individual item re: what you paid and what it sold for. All that matters is your TOTAL inventory cost and your TOTAL gross sales (which includes shipping paid to you by buyers). No need to kill yourself trying to track each individual item unless you want to do it for some personal purposes.

[zoesam]

Go to the IRS site & read the Schedule C. That will make everything a whole lot clearer! You can also read the instructions there, but just looking at the form itself, makes everything sort of come into place. It was the most helpful thing I did when I first started.

[Deleted]

Some basic #'s you will need:

Gross Sales (including shipping the buyer paid)
Shipping Expense (actual cost, not what you charged)
Paypal fees
Ebay fees
Total inventory expense (add all your receipts up)
Value of ending inventory (what you paid for what you have left, an average will do, doesn't need to be exact)
Total business miles driven if you plan to deduct mileage
Beginning and ending year odometer if you want to take the maintenance deduction
All other business expenses like any listing program you use and pay for, envelopes if you have those receipts, paper, tape etc

Those are the ones I can think of off the top of my head.
It really is very easy once you do it. I agree with looking at the Schedule C, it's pretty self explanatory and they have a great help section.

[chapeaunoir]

I use Outright.

[Deleted]

Thanks everyone! I thought I was going crazy -- I knew I had posted this thread and then couldn't find it the last several days. Thought maybe I just imagined posting it! (Not sure how it ended up under news stories.)

So, where do I find all this information? Is there someplace on ebay that gives total gross sales for the year and total of FVF? Is there someplace on paypal that lists total fees paid and total actual shipping costs? Or do I have to go back transaction by transaction and add all that up?

For total ending inventory, do I just subtract out the amount paid for the items that sold? I'll take a look at the schedule C. I doubt I'll claim home office or maintenence deduction but may go back and total up my miles. Is there a standard deduction you can take instead of itemizing business expenses?

[Deleted]

I've been busily working on this and have most of the numbers together. Looks like I am going to have more in expenses than in income this year. Is it possible to carry over some of the expenses against income for 2015?

[val2525]

Yes and no. You should put it all on your 2014 Schedule C, the loss carries to the front page of your Form 1040. If you have other taxable income, the business loss can be offset by other income.

Example, you have a $2,000 loss on Schedule C (eBay) for the year, but $45,000 in wages from w2s (DH, job for you, both of you combined, etc). The net loss from the Sched C would go against the earned wage income, reducing it, so you'd have taxable income of $43,000 (45,000-2,000), but there would not be a net loss so nothing to carry forward.

OTOH, say you had a PT job with wages of $5000, and net loss of $6,000 on your Sched C. The (6,000) is applied to the +5000 for net loss of (1000), which can be carried back 2 years or carried forward until it's used up.

Sort of a simplified answer, as your net taxable income or loss wouldn't be quite that clear cut, but you get the general idea.

[Deleted]

OK, thanks for the help! DH does the taxes and uses turbo tax so hopefully that will direct us to what we need to do.

Would it be possible to create a section on the board just for taxes to move this thread and the other ones that are tax related into? That way, it would be easy for people to find this info in the next month (and next year) when they need it. I feel like it will get lost in this section. Or maybe the business tips / resources would be more appropriate.

[val2525]

I moved it.

[Deleted]

I used Turbo Tax for years, but they pissed me off with their high price for the Schedule C. I used Tax Act (several boardies recommended it!) and it was excellent. It was my first year filing eBay taxes, and I am so grateful for everyone's guidance!

[val2525]

TurboTax has had some issues with false filings, at least two states stopped efiles temporarily from TurboTax.

[Deleted]

So...questions...
Can you verify that the correct accounting method for an ebay seller is cash rather than acrual?

I'm finishing up my inventory calculations -- how do you value things that you took out of your own personal closet that sold -- should I just assign a value to them and include them in the starting inventory? Also, how do you account for items that were bought for ebay but then taken to a consignment store and sold there (I guess the same ? would apply for things sold on Shop Hers, ect). I always take store credit rather than cash and end up buying other stuff with it.

[zoesam]

Cash vs. accrual is a personal choice. I find cash easier personally. As for those other situations, I really think those are anomalies, that everyone accts for differently. I treat personal items from a thrift differently than personal items that I paid retail for. The ones I paid retail for are a loss, not a profit, so I have a separate category in Quicken for "ebay personal". Personal from a thrift, I will usually either do a swap with something from my inventory, but you could assign a value based on what you typically pay.