Online Seller Tax Tips & Ideas

ALL income must be reported on your taxes! You may think hiding income is OK... but the few dollars you think you can hide may turn into 10 times in fees & interest if you get audited.

Keep track of all income on software like quickbooks or quicken. Excel spreadsheets are also a good idea.

ALL bank statements need to be kept to verify income as well. Either print your bank statements or be sure to hang on to the ones you get in the mail. Keep both personal AND business accounts.

1099's... keep any 1099s you receive from businesses and any merchant accounts. With the new laws coming up this year... paypal, merchant accounts & others are now required to send you a 1099 when you make a certain amt of sales and transactions. Don't be "skimping" on reporting that income cuz those 1099s are reported to the IRS.

Cash transactions also need to be reported. If the IRS knows you have cash transactions in your business & you don't report it... you are busted in an audit.

Barter is another form of income that the tax form has a spot for. If you do a lot of bartering, that is considered income as well. Don't forget to report it.

Each of your businesses needs a separate schedule C. Schedule C's are for your business deductions. They will show the Loss or profit in your sole proprietor business.
AGAIN.... check with your Tax accountant with questions for your particular situation.

Things to keep:

* Pocket book calendar in the car to write down business mileage

* If you are taking a home office deduction... hang on to all utility bills, home repair bills, phone bills, cleaning bills

* All cost of goods receipt. If you buy inventory or products to make things that you sell... hang on to those receipts.

* If you take a business trip.... keep ALL receipts. Hotel - meals - car rentals - parking slips - tolls - flight tickets - convention passes... just keep everything. You may not need it all, but better to be safe than sorry.

* Keep all receipts from Magazine subscriptions, books & newspapers that are used for your business

* Receipts from your Website domains & hosting

* Professional fees & form fees like your lawyer, accountant, advisers, filing form fees like trade name, Secretary of state fees, licenses, sales tax, copyrights, trademarks, any city or county fees... any forms you file for your business.

* Bank fees, Merchant account fees, ebay fees, paypal fees, monthly online stores fees.

* Postage & shipping related costs. Keep all the receipts for not only stamps & shipping costs, but if you have monthly fees at stamps.com or Endicia. If you have any fees associated with a meter machine. Don't forget any of those.

* Advertising.... do you have business cards, postcards, flyers or brochures? Do you spend money on banner ads or google ads? How about any advertising in local papers, magazines or on the High school calendar? Remember to keep track of all of those costs too.

* Then remember to keep all receipts from office supplies, toners, inks, binders, office equipment such as printers, scanners, postal scale, computers, software. Don't forget to keep the info & cost of any extra insurance, warranties or repair contracts.

I keep ALL receipts & then get rid of ones I don't need at tax time.

3 Hole punch your statements, forms & printed downloads. Keep your receipts in a zippered pouch that has 3 holes for a binder. Then keep neatly on a shelf.

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