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Hello everyone and thanks for joining us today. My name is Phyllis Wischer. I am an eBay Education Specialist, and co-founder and Business Success Coach for Certified Solution Provider SageFire, Inc. - creators of KeepMore.net. I am also a Public Accountant with over 20 years experience in helping thousands of small business owners with their bookkeeping, accounting, payroll and tax needs.
As a Certified Solution Provider, SageFire specializes in helping small business owners’ track their business financial activity using its online accounting, contact management and document storage solution. Our solution, KeepMore.net makes it simple for you track your business while maximizing your tax benefits.
There are two definite reasons why you want to treat your ebay business as a business:
• You don’t want to over pay the IRS • You don’t want the IRS to classify your busness as a hobby because of the potentially negatiave tax consequence of “hobby” vs. “business”
Before we get into a lot of discussion about that subject, lets take a minute to review whether or not your eBay activity would be considered a business according to IRS rules and regulations.
• If you sell personal items online on an occasional basis, like once or twice a year, then this is considered to be equivalent to a garage sale. In a garage sale, you generally sell household items you purchased over the years and probably paid more for them than you sell them for. You don’t have an eBay business! • If you have recurring sales, are purchasing items, maybe from someone else's garage sale to resale with the intention of making a profit, or selling items for families and friends then you may have started an online auction business. • Fact: If you are in business then it’s time to treat your business like a business
Here is a great IRS link to review the above information.
Once you have made the determination that you do have an eBay business, you need to build your business to stay in business.
Let’s start this discussion with the most obvious “Don’t”: Don’t overpay the IRS!
It is estimated that 99% of very small business owners overpay the IRS… every year! Why? Well, we have all been guilty of it: Sloppy Record Keeping. Lost receipts, not knowing what to deduct, unlogged mileage... But the result can have tremendous impact you and your family, you could be throwing away hundreds if not thousands of dollars each year.
I am starting an eBay store. I am currently doing research on the items I am selling so I have great descriptions to more accurately give a potential buyer the best info. Can being too wordy be a plus or minus?
For those needing a more complicated double entry full accounting package, you have several QuickBooks options that will work with eBay’s new 100% web based Accounting Assistant program.
QuickBooks combined with eBay’s new 100% web based Accounting Assistant
wheldar - Thanks for joining us. We hope you get a great deal of value from our workshop and all the others that eBay offers to help you get the most from your eBay experience. We look forward to your questions.
Later in this workshop I will be sharing some detailed information about the solution we offer, KeepMore.net, but whether you adopt our solution or a different one, be sure your system helps you to quickly, accurately, and securely capture all of your business’s income and expense activity.
Make sure your system is truly easy-to-use, or you won’t use it. Our philosophy is to minimize your the time spent on record keeping, so you can get back to selling!
269angel - according to the IRS - check out the link in Post #4 - if you sell items for friends and family you have a business. My advise is for you to ask your accountant or tax advisor how you should treat your eBay activity.
wheldar1 - that is a great question; however, is it now part of the topic of today's workshop. We suggest that you check out some of the help that is accessible through your eBay site to get the answers you need on this subject.
Don’t lose out on taking a questionable deduction by ignoring it – ask a qualified tax advisor if it is a deductible item. Remember every legitimate expense you fail to record costs you dollars out of your pocket.
Recently I worked with a tax client who had their business status (actively seeking a profit) changed to a "hobby" status (not actively seeking a profit) by the IRS. There was no bookkeeping done and the IRS was not able to derive from what records they did have that they were actively seeking a profit. This was a sole proprietorship business entity filed on the Schedule C of their 2006 income tax return.
When the status is "hobby" vs. "business", you must report all of your income on Page 1 of the Form 1040 and all expenses (but only to the extent of income reported on Page 1) must be reported on Schedule A reduced by 2% of Adjusted Gross Income.
Let’s look at at a very similar scenario for a 2007 taxpayer and how it would affect the tax return if the IRS audited this eBay business; and, because the taxpayer did not keep good records (or had no records at all) the IRS reclassified this business as a "hobby". In the case of selling on eBay, the term ‘hobby’ refers to selling items on eBay without a "profit motive."
kathy_the_green_fish - KeepMore.net is a full bookkeeping package that allows you to track your income, expenses, auto miles, customers and vendors quickly and easily. Please check out more on our web site - our link is listed at the end of this session.
We do not disclose any information in your KeepMore.net account to anyone. We do not have access to your password and cannot access your account with your permission.
KeepMore.net is useful for any type of small business.
tcb_top*priority - The IRS web site has become very user friendly. Go to www.irs.gov and search on Small Business. There you will get a lot of information about income and expenses for small business owners.
There are also a lot of books and resources on the internet.
Our KeepMore.net package provides a Guide Me tool to help you know what is deductible and where to deduct the item.
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