Ok I think I get what you’re saying. So by using generic listing titles, they can use pretty much any related receipt from same year for deducting. I actually didn’t know that you can’t simply claim inventory as a whole as a deduction if you’re on a cash basis. I think accrual changes things a bit, but might be too complicated.
The ideal scenario for me would be to deduct all ‘inventory’, including online purchases, garage sales, flea markets, antique stores, etc. and ending up with a tiny profit margin to pay taxes on. Guess that idea is toast
This is how I log my sales I only keep track of actually money received and then subtract cost and come up with taxable profit per item, all the shipping and fees will be in my sales report for Mercari so no need to add them here.
That’s pretty clear, thanks. How far back can the invoices go for you to be able to use them? 1/1/21 for all 2022 sales or up to 1 year prior to sale date? So as far back as 1/5/2021 for anything that sells today.
Also, and feel free not to answer this, why just 19.95 as cost for aphra 7? You also paid shipping & tax? And couldn’t you potentially use that entire invoice from tfaw? Or add in other invoices for freebies that you included with the sale item? People love freebies.
The book was $17.95 I added $2 for its share in shipping from the tfaw invoice as well. I can’t claim the whole $700 tfaw invoice just what I sold from it assuming it’s within a year of the purchase.
Just to note something for those of you who are not primarily “in the business” of selling comics, if you are more of a “casual” seller (like me) as opposed to someone who is primarily in the business of selling, the whole inventory thing is not applicable to you (i.e., one year to consider inventory depreciation). I spoke with a CPA buddy of mine and he confirms. Thus, for the “casual”’ seller, you can still consider cost basis, even if after one year. The thing of course is that you still have to be able to prove what your cost basis was for the item sold and you would be subject to the tax rate for collectibles (which I believe is a max of 28%, for better or worse), but it’s a hell of a lot better than being unable to claim the cost basis of your sold item if you purchased that item over a year ago.
I also will provide the same disclaimer as others that I am not providing any tax or legal advice and this shouldn’t be taken as that. Talk to a CPA!
Yeah. My accountant told me we will just file a schedule c so I only pay tax on the profits, not the gross amount collected. Of course, I have to provide a detailed sheet to him showing the sale price, eBay fees, shipping, fees, initial cost of item, etc.
From what I gather you can claim a percentage based on daily usage so if you search buy and sell comics 8 hrs a day you can deduct 33% your total internet bill for the year. You can also deduct a phone bill if the line is for strictly business.
I can’t say for sure, but I believe it depends on whether you can prove the deduction is connected to business purpose. Personally, I established my LLC several years ago and can rightfully deduct a portion of some of my utilities on my taxes. Whether you have to have a business setup to claim deduction, I don’t know. Regardless, I think it’s just a good idea to setup some business structure, even at least a sole proprietorship if you don’t want to have to think about reporting requirements, etc.
I work from home and probably 90% of my internet activity is work related and I never bother claiming this. It just puts the risk at getting audited so much higher.
Was waiting for this to hit the general public and outside of our little comic/card/collectible world.
I remain of the opinion that outside of “us in the know”; the general public… millions and millions of people - are not aware of this.
And to use the line “well they should have been anyway”; doesn’t change the fact that they weren’t and are now significantly impacted to the point where some are dropping off.
I haven’t sold one thing online since Jan 1; and I will not
Ignorance of the law is not an excuse though. If people didn’t think they had to pay taxes on income from selling stuff online, they’re just asking for punishment followed by humiliation when the IRS tax man a cometh!
100% agree.
As a comic guy I tend to concentrate on cause/effect, trends, action/reaction rather than the “shoulds”.
We all know what “should” be
But I think we sometimes miss what actually is; and it is there that is important for me when assessing paradigm shifts in the community
This is different. It was already announced last year that they’d do this, but it only applies to banks reporting accounts that has in/out activity in excess of $600 to the IRS for review. This doesn’t change anything, unfortunately, with regard to $600 thresholds for 1099-K reporting.
