posted on May 8, 2001 11:02:56 AM
We are thinking of selling on Ebay fulltime.....We have done pt and can make a living doing sulltime...We are clueless when it comes to Claiming taxes...Any help?
Should we go to an accountant? We would probably do $500+ week....any help would be appreciated.Thanx!
posted on May 8, 2001 11:17:56 AM
Yes, absolutely, positively get an accountant -- at least for the first year.
An accountant can help you get set up and alert you to the potential problem areas, as well as potential savings.
My accountant saves me far more than his fee each and every year.
posted on May 8, 2001 02:57:30 PM
I agree wholeheartedly with vargas' advice. Get it done "right" the first year, and then you might feel comfortable doing them yourself in subsequent years (I use Kiplinger TaxCut on my computer, but many people like TurboTax). An accountant will let you know what expenses to keep track of and the best way to do it. I'm sure he/she will be THRILLED to show you how to set things up, because it's got to be a nightmare when people don't know how to keep track of things and bring in their shoeboxes on April 14 expecting to get their taxes done!
posted on May 8, 2001 05:28:13 PM
You can be a sole proprietor and just use your Social Security number. For the income you're projecting and low risk aspect of online selling, you may not need to incorporate. Your accountant will give you his opinion (which should be followed), but I've filed Schedule Cs for years since I do work as an independent contractor.
The main thing is to keep ALL records separate--open a new checking account (AFTER you decide if you'll keep your own name, have a DBA, or file as a corporation!) and get a credit card to use exclusively for business expenses. I've seen a number of sellers here praising QuickBooks (again, check with your accountant), but a lower-tech option is using Quicken or Microsoft Money to track income and expenditures. I use that for my personal use, because you can categorize EVERYTHING about your income and expenses. One click of the mouse gives me an end-of-year report that has all my tax form items, and my taxes are a snap!!
posted on May 9, 2001 02:09:04 PM
As a somewhat moderate seller on ebay and someone who had a legit cleaning business here's my two cents:
1. Make DARN SURE that you are going to sell enough voulume to pay for that accountant. They're not cheap.
2. Quickbooks is by far the best accounting program I've seen. It's user friendly and worth every penny.
3. Take the above advice and be a sole proprieter. Having a Tax ID # is a pain in the $!#@. At that point, big brother is all over you.
4. DISCLAIMER : THE FOLLOWING IS OPINION ONLY. DO NOT TRY THIS AT HOME. NOT RESPONSIBLE FOR LOST OR STOLEN ITEMS, BODILY INJURY,ECT,ECT. Although many people will agree and as many will disagree, DO NOT make the mistake of going into "official business" too early. The government will eat you alive in various taxes and regulations. Get by with what you can get away with until you feel it's too much of a risk.
"Although many people will agree and as many will disagree, DO NOT make the mistake of going into "official business" too early. The government will eat you alive in various taxes and regulations. Get by with what you can get away with until you feel it's too much of a risk."
===============
Like you, I'm a moderate seller on eBay with a regular sole-proprietor business. I've spent next to nothing to legitimize my eBay sales, and have had to deal with nearly no extra bureaucratic nonsense.
I file two Schedule C's instead of one. My separate eBay checking account is free. I paid nothing for my CA resale license, and I paid about $10 in state sales tax (very few in-state sales for some reason). My business license costs me $25 a year. I've never been audited, even though I [legitimately] claim an in-home office and assorted related expenses.
What's the big deal? IMO it's just easier, safer, and more sensible to do it right the first time. There' really no need for incorporation or a lot of legal rigamarole, and if you are fairly conversant with a Schedule C and basic bookkeeping, you really don't need an accountant other than perhaps for an initial visit to get you set up.
"Like you, I'm a moderate seller on eBay with a regular sole-proprietor business. I've spent next to nothing to legitimize my eBay sales, and have had to deal with nearly no extra bureaucratic nonsense."
I am very glad to hear of your smooth sailing. My experience has been as a Limited Partnership filing 1065 forms, workers compensation benefits, unemployment compensation premiums liability, insurance, ect. Perhaps a being a sole-propreitor is much easier. Not knocking you. Not being inflamatory. Just expressing an opinion that my particular experience has not been as pleasant.
posted on May 10, 2001 07:20:58 AM
"Is an internet chat board really the right place to seek tax advice?"
Actually, the kinds of questions being asked here are probably OK for a chat board - being fairly broad and basic ("do I need an accountant? how do I get a tax number" ). These kinds of questions, plus pointers to various options on accounting and tax software, for example, can be very helpful to people. "Eye opening" answers that can make people better educated (or at least able to ask better questions) can be excellent inthis kind of forum.
If torley were asking about the specific deductibility of an obscure expense on Schedule C, then this would be a bad place to go. But he wasn't, so it isn't.
[ edited by captainkirk on May 10, 2001 07:21 AM ]
posted on May 10, 2001 07:32:18 AM
CLEAN1, the question wasn't about going into business in general, but about treating full-time eBaying as a business.
Probably 90% of eBayers do not have employees, nor are they incorporated (and probably don't need to be). Liability insurance is almost certainly not an issue for most of us. I'm not trying to be argumentative, either, but it just seems easier and safer to get started the right way. For most of us, it takes a minimal investment of time and money to do that, and IMO it's a smart move.
posted on May 10, 2001 07:41:16 AM
If someone is truly attempting a full-time ebay business, with purchases for resale of an amount that would potentially result in "middle class income" (say $20K+), its a "no brainer" to make it officially a business. In most states an owner-as-only-employee business isn't that big a deal to maintain. And the risks of not doing so are reasonably large, and you are pretty easy to find if anyone comes looking for you (a quick sort of ebay fees by seller would spot the full-time sellers in an instant).
