eBay Accounting

If you've been looking for an easy way to keep track of your eBay sales and fees, then you've found it!

Easy Auctions Tracker is the Ultimate Excel spreadsheet solution for eBay sellers and Trading Assistants. This spreadsheet doesn't calculate your fees, it actually COLLECTS your transaction information from your eBay account for you!

Easy Auctions Tracker is fully automated and has been Tested & Certified by eBay as a compatible application. By using this spreadsheet, you will be able to quickly collect and record your transactions (sold items and unsold items) without the need to manually enter the information.

With the simple click of a button, Easy Auctions Tracker is able to collect all the information for a entire month's worth of sales from eBay's servers for you. No need to know the item numbers of the sold items, just select the month & year then click the "Get All Items" button.

As an accountant and tax professional who works with eBay sellers, I can say that this spreadsheet will make your bookkeeping and thus your tax preparer's job much easier! Which will mean less time and lower fees for you.

I was excited to find this worksheet and recommend it for eBay sellers who want to track their sales and associated fees in a spreadsheet, but don't want to spend hours entering the information manually.

You can check out the worksheet at EasyAuctionsTracker.com.

Buried deep in the housing act that was passed earlier this year is a provision that requires credit card processors - including companies like eBay and PayPal - to report annual gross receipts of it's merchants to the IRS.

Credit card processors will be required to file Form 1099 for each merchant that has at least $10,000 in gross sales and 200 transactions.

Companies have until 2011 to comply with this new law.

The purpose of this new law is to raise revenue for the housing recovery package and to close the tax gap that exists. The IRS estimates that it loses billions of dollars in tax revenue from small businesses who under-report (or don't report) income.

While I'm worried that this new law will cause the cost of business for small and online business owners to go up (in the form of higher eBay fees, higher PayPal fees, etc.), I also think that all small business owners should pay their fair share of taxes (I pay my taxes, why shouldn't all small business owners?).

So here are some tips to help online business owners comply with the new tax law, without paying too much to Uncle Sam:

* Treat your business like a business. Register a business name, hire an accountant, keep good records. The more you can do to treat your business like a business, the less likely the IRS will reclassify your business as a hobby.

* Keep separate accounts and records - have separate eBay, PayPal and checking accounts for your personal and business activities.

* Report your income! Even if you don't receive a 1099 from eBay, PayPal or the other companies that will be required to file one, you should still report all of your profits from your online business.

* Learn what's deductible and what's not deductible - you'd be surprised how many people do not deduct business expenses because they don't know they can.

* Don't be afraid of the home office deduction, and other deductions that have been labeled as a red flag. Being a small business owner is a red flag, but that doesn't mean you should go out of business, or worse, not report your income!

Thanks to this new law, it is more important than ever that eBay sellers learn how to keep good records, so that they can take advantage of all of the tax deductions and credits available to them.

Announcing the free 'Tax Tips for eBay Sellers' special report! This eBay business tax guide will show you:

* Whether you're required to pay income taxes on your eBay income
* How to qualify for and deduct your home office
* About self employment taxes and how to minimize them
* The most common deductions available to eBay sellers
* How to value your inventory for your tax return
* All about estimated tax payments including when & how to make them
* And more!

Claim your free 'Tax Tips for eBay Sellers' special report here!

Sole proprietors are not necessarily required to get a tax identification number, but it may be a good idea to have one.

A tax identification number or an EIN (employer identification number) is a nine-digit number that is assigned by the IRS to businesses to be used when filing tax returns, hiring employees, and for setting up qualified retirement plans. Many banks require an EIN to apply for a loan or to setup a business bank account as well.

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When it comes to bookkeeping, there are two kinds of eBay sellers. Those that completely ignore how much they are earning and/or spending in their business until they're forced to face the music (usually this happens at tax time, or even worse - because they are being audited by the IRS).

The other side of the coin are the eBay sellers that are amazingly organized and know exactly how much they've earned and where every penny of their money is going.

While it's no fun keeping track of your earnings and expenses, having a good bookkeeping system in place can save you hundreds or even thousands in taxes because you're less likely to miss a deduction or credit that you are entitled to.

Here are some recommendations for keeping good records for your eBay business:

#1: Record income and expenses on a regular basis.

If you have a spreadsheet or use accounting software, recording this information is as easy as taking a few minutes each week or about an hour a month and updating your spreadsheet or accounting software.

If you don't have a spreadsheet or accounting program in place yet, you should still setup and keep a file for your week's receipts and payments. Using this method all you have to do is pull out your paperwork at the end of the week, add it up, record it, and you're good to go.

#2: Create expense categories that make sense for your business.

Trying to fit your business budget and bookkeeping categories into a standard form may not work for you. Not all categories will apply to your business and it can end up feeling like an incomplete and inaccurate project. Spend some time going over your accounts and create a list of expense categories that work for your business.

#3: Have a method.

When you have a bookkeeping method, a software program or a spreadsheet, and you use it, transferring the information to your budget or vice versa is just like cutting and pasting the information from one document to another. It's easy.

Having control over your money is a necessity as a business owner and if you're not keeping a budget or tracking your accounts, you're less in control of your money. It's worth taking a few minutes and organizing your accounts. You won't regret it!

With gas prices so high, it's important that you keep track of every mile you drive for your business, so that you get the most out of the automobile deduction on your tax return.

In order to take the automobile deduction, you should keep track of your business miles. The best way to do this is to keep a mileage log in your car and record every business related trip you take.

Your mileage log should include the date, the purpose of your trip, your beginning and ending odometer reading, and the total miles for that trip.

I have created a mileage log for you to use, which you can download here:

Mileage Log

Would you like to reduce the taxes you pay on your small business income? Would you like to keep your children busy, and learning valuable business skills at the same time? Would you like to build your family's wealth?

What if you could reduce your taxes, build wealth, and teach your children about business - all at the same time?

You can! Hiring your children in your business is a legitimate business strategy, and it has many benefits as well!

Announcing "How to Hire Your Kids in Your Business: A Step by Step Guide"

Click here for more information...

As an eBay seller and a CPA, I get a lot of questions about eBay and taxes. EBay sellers want to know if they are required to report their eBay income, whether they need a tax ID number, how to make estimated tax payments, and many more questions.

I have been answering questions about eBay and taxes on my blog, my squidoo page, and on several eBay membership forums for a while now, but as the questions keep coming, I realize that eBay sellers need more help than I can provide on a blog/forum.

As a result, I am now offering the following services to help other eBay sellers with their financial and tax planning needs:

New Business Consulting - This is a one-hour consultation to address your most pressing financial questions about starting your eBay business. Topics discussed will include business entities, estimated tax payments, tax ID numbers, filing sales and income tax returns, common business deductions for eBay sellers and more.

Tax Preparation - Year round tax preparation is available to eBay sellers who operate as a sole proprietor or an S Corporation. As a CPA, an eBay seller, and a home based business owner, I understand the unique tax needs of eBay sellers.

Tax Planning - Tax planning is an important part of any small business, as good tax strategies can minimize your tax liability, thus allowing you to keep more of your profits. Tax planning includes estimating your quarterly tax payments, making sure you get all the deductions you are entitled to, and exploring tax saving strategies such as hiring your children in your business.

For more information about the services above, please email me at kristine@internetbiztaxtips.com.