Re: Article about eBay

From: Donna (donna_at_exitstageleftcroakerwoods.com)
Date: 03/29/05 

Date: Tue, 29 Mar 2005 01:14:24 GMT

"Sandi" <sanditypes@yahoo.com> wrote in
news:3aro33F6ddjrlU1@individual.net:

>> I always claim my eBay income and I charge state tax to Virginia
>> buyers. I also deduct miles to the post office, resale item
>> purchases, etc. A business license is cheap and easy to get, and why
>> not do it legally if
> you
>> can keep yourself out of hot water? State tax ID is free, in
>> Virginia, and the only time you need to use it is when you sell to
>> people in your state. It also allows you to qualify for many
>> wholesale opportunities.
>>
>> It's all in the cost of doing business and nothing new.
>>
>> --
>> ~~~~~~~~~~~~~~~~~~~
>> Donna
>>
> Donna, how do you determine what your cost of goods sold was? Do you
> buy and sell, or how do you acquire your items? I just wondered
> whether the IRS is expecting people to claim the entire amount they
> sell for as income, when really it's just the difference between what
> you gave for it and what you sold it for (which in the case of those
> cleaning out closets would seem very difficult).
>
> Sandi
>
>
>

I keep track of what I buy by using either Paypal, credit card, or check.
I often have to keep receipts, but not always because my cc sends me a
year end statement with all of that on it.

As for what I sell, I use eBay's invoicing format in Excel and use the
final sales price as well as what it cost me to list and sell on eBay.
Same with Paypal. I can download their monthly statements and break out
what's what.

If I buy at yard sales, which I hardly do anymore, I keep a list of costs
for that foray into yard sale world. If I donate to the thrift store
instead of selling, then I document that too.

I also deduct my home office (in my case 1/8th the house payment,
utilities, etc.) and miles to and from sales locations and the post
office.

I have a business license and a Va State sales tax ID, and it all works
out okay. I have to keep a lot of records, but again, eBay and Paypal do
most of it. I lump all the money earned with the 1099s I get from
contracts, and then do lots of figuring in categories for expenses, give
the whole thing to the bookkeeper (sister in my case) and she does our
taxes. I do 90% of the work and I have a slip of paper or some kind of
trail for every item I write down on the year-end paperwork.

Cleaning out closets are different. I'm not sure how that would work, to
tell the truth. I happen to lump it in with the income, but it's just
easier that way for me because I'm selling so many things bought
specifically for sales. I also purchase a lot of items specifically for
use in quilts and kids boutique clothing that I make and sell. 

-- 
~~~~~~~~~~~~~~~~~~~
Donna

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