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Ebay receipt generator for small businesses

what's up guys welcome to daily refinement this video is a long time coming it's exactly how I file my taxes as an eBay seller a lot of people have asked this question and I'm going to go over how I do my eBay accounting and bookkeeping in actually under five minutes per month you could do the whole year in under an hour for sure so I'm going to go over that step by step in this video a lot of people are also scared of that $600 rule where eBay will actually report your income if you earn $600 or more in one year I don't want you guys to worry about that because on this channel we recommend people list at least five items per day and if you make $10 profit on five items per day that's literally $188,000 a year in profit so if you have to pay uh income tax on that 18,000 I'm going to show you how to do it in this video so I appreciate you guys don't be afraid of paying income tax because with an eBay business you get the opportunity to write off a lot of things and a lot of people even with a regular job would consider opening an eBay business if they understood the tax deductions so I appreciate you guys we'll see you in the show [Music] before we get into the show the example that I'm using has 1,000 transactions in a month so you do not need line by line accounting where you have 1,000 lines for 1,000 transactions and each line has all the different costs that you paid all the different shipping that you paid all the different eBay fees that you paid that would be literally thousands and thousands of cells so instead of that you just need one category and I'm going to show you guys how to do that so essentially you can add up all your shipping and just count that as one deduction on your taxes so I'm going to go over how eBay reports your taxes in this next section via a screen share if you guys have any questions please don't hesitate to comment down below um exactly what your question is or you could email me at chrisa refinement. we'll see you guys in the screen share okay so here's the spreadsheet again a reminder it's a bitly daily refinement taxes you can click on file and then make a copy and you can save this onto your own computer to use and under your own information so the example that I'm going to use today has 1,000 transactions and I'm going to go over the steps that you need to set up your accounting and bookkeeping as an eBay seller so number one you need a separate bank account so you need to go to the bank and set up a bank account I've estimated this to taking two hours of your time you do not need to be a business you do not need to be a corporation you're by default through the the IRS a sole proprietorship so all you need to do is open up another bank account with your social security number um this is the account that you're going to attach to your eBay account out so the revenue goes in there um so after you get that set up I'm going to recommend either you use the business debit card or I recommend a separate business credit card that you only use for the business and that you pay off using this bank account so a debit card is easier if you're not good with numbers I recommend you just use the debit card do not mess with the credit card if you're going to use a credit card remember you have to pay off your balance and full every single month and I have other videos on how to maximize credit card credit card points and how to Leverage verage your credit cards as another stream of income but to make it easy if you're not good with numbers just use your debit card and this separate bank account this is really important setting up a business bank account and a debit card is going to take a couple of hours but it will save you a ton of time um so number three this video is actually sponsored by 1800 accountant they have offered every single person in my audience a free consultation so please help me out and actually call them the link is going to be in the description below and in the first comment click on that and get a free consultation and the reason why I want you to set this up is I want you to explain your situation to the accountant so that you can explore the different tax deductions that come with that so are you eligible for a home office deduction how much mileage can you write off everyone's situation is different you want to maximize your deductions they've been very generous they offer everyone a free call where they go over all the Consulting for you please use it it doesn't cost you any money and it helps the channel so number four Once you have this spreadsheet filled out you can actually take this spreadsheet your bank account um your eBay fee statement and any receipts that you have when you write on a receipt book for a cash transaction you can put all those together take them to a CPA and they can file your taxes so how the taxes works is it's actually a Schedule C and this is what you use when you're self-employed and when you work for yourself you file a Schedule C on your taxes so whether you have a corporation or not it's the same you file a separate in a statement for the IRS to let them know how much money came in so this is the important part and if you give the the accountant just your bank statement your credit card statement the handwritten receipts that you made like at garage sales or flea markets and your eBay statement they can do your taxes for you it's very straightforward or you could even do like myself and just do it yourself it's not very complicated um do I recommend you sign up for a business probably not in the beginning just file taxes under a sole proprietorship and if you are wondering if you should or shouldn't get a corporation um I would talk to the CPA for free and figure out exactly if it's worth it for you or not um so um number five also if you want to join my mentorship group at patreon.com resource podcast we have spreadsheets and other tools available to help you keep track and learn how the expenses work on eBay so now we're going to go into the spreadsheet that I made this spreadsheet in my opinion is enough to really understand how much you owe in your taxes but again I'm not an accountant so don't sue me this is just how I actually file my taxes so pretty straightforward let's get straight into it um the first part of it you're going to fill this out from the eBay performance sales tab so I've included the link here on the spreadsheet once you click that it'll open up in your browser your sales history Mark the specific month that you're looking at so as an example I'm using one of my stores the actual February numbers to let you guys know what they are this store I do completely by myself it's at a 30 item a day um 30 item a day Clip and this this is about 1,000 sales for last month so I'm going to give you guys the exact numbers from my store to give you an example of what this looks like it was much easier to do this store without posting it on social media because when you're on social media you have people looking at your store that don't buy anything it messes up the eBay algorithm so if you're wondering if you you should use social media to help your eBay store I would say not uh if you're just selling a few items then sure talking to your audience is great but if you have a lot of audience um that traffic that doesn't convert hurt your store so in this example the total revenue including taxes was 2,500 or sorry $2,852 27 this is important because this is the number that eBay charges you their fees on so this is not the amount that you're responsible from the IRS this is the amount that eBay charges you their eBay final value fee on it's important to understand that I have a separate challenge the 100 listing challenge where you can go in and figure out how fees work but how fees work and how you file your taxes are actually separate things this is more on how you file your taxes so of that 25852 $1,285 17 was collected by eBay as sales tax and remitted by eBay to the state that it was belongs to so they I didn't I never saw that money it came in was collected the sales tax and went out to that respective State not every state eBay collects the sales tax you might be liable in your state to to collect remit and keep track of all that but I think in the future or if it's not already the case eBay is collecting that tax and taking careed for you so now this is the most important one I've marked this in the spreadsheet as a black box it's the eBay Revenue this is the amount the that eBay will report to the IRS okay it's very important because in this scenario the IRS is going to get a note from eBay saying I did $24,500 in Revenue if I do not file my taxes that's the amount that eBay is going to charge me their tax based on okay so it's my job it's your responsibility at home to do the deductions so that you don't get taxed on this full amount and don't worry it's not complicated pulling three numbers from that spreadsheet I'm sorry from that report will give you this spreadsheet you need to pull in how much eBay collected in sales tax how much the eBay Revenue was and how much the shipping fees were and how much the eBay fees were actually so those four things I'm going to just change this right now you need to put in the eBay fees so once you put in the eBay fees the shipping costs and the taxes the calculator will tell you how much you made and how much should be sent to your bank account now this is important and it's a bit confusing the amount that's going to your bank account will not match the eBay statement now this is a confusing Parton I had to call an accountant to make sure before I made this video that difference is the refunds and credits that happen in your account now this is very diff difficult to reconcile because refunds and credits that happen are usually from previous month's transactions so unfortunately it's like this month you had a refund or a credit from something that happened 40 days ago so it's difficult to reconcile so what I recommend is you just do one line for eBay refunds and credits and in this scenario this spreadsheet will calculate that for you automatically so this first part will give you what eBay reports but what eBay reports and what they send you will be slightly different because they've deducted all the refunds and credits and fees so that amount that they send to your bank account this is the important part because that's what your gross receipts are how much you physically got in your hand from eBay so in this scenario it's $113,000 um is what they deposited into my bank account so this is interesting right I did $2,852 in that's how much money came in into my um account from sellers around the world I'm sorry buyers from around the world half of that is already gone with shipping costs um the total um taxes that were collected and remitted by eBay so I'm already left with about half so it's interesting to understand what is left so from there I just entered in a couple of common things that people have in their eBay store there are a lot more deductions with this so you have to talk to an accountant like 100 accountant and see what other deductions you qualify for but the main ones I put in here are cost of goods sold so in this store every single item I got from the the flea market and my average cost was $1 so 1,200 transactions um so I put in the cost of goods sold of 12200 right so depending on what your cost of goods sold are what this is going to be is the total of all your receipts from Goodwill thrift stores online Arbitrage Target all that stuff put it into a shoe box maybe scan them online if if you want to go that far you don't have to um add all those amounts together when you go to the garage sale withdraw money from the ATM write that on your receip book as your cost of the garage sale add all that number together that's your cost to good that's how much you paid per item then a lot of people have storage costs um so if you have a storage unit you can put in $1,000 one of my units is um I use for this separate store and I just put in a rough amount of $11,000 for electricity and the cost but if you do this at home this amount is actually going to be zero so if you're doing this at home you're kind of just utilizing space that you already have for yourself you could put zero here um finally um there's two more things the mileage deduction right now in 2022 is 57 cents per mile so at the bottom you enter in how many miles you drove so I recommend on the first of every single month set an alarm on your phone mark down what you drove for the month so let's say you drove 1,000 mil 50% of the time you use a for family 50% of the time you use it for business deduct that in half so now we have 500 miles I put in here as for this example so I get to deduct um oh it's actually 57 cents a mile let me see yeah okay so my deduction is $285 for my vehicle expenses there's other ways to account for that you can either do a mileage deduction or you can add up all the literal costs of your car but I don't recommend you do that I always recommend buying a fuele efficient car um japanes car and then taking the mileage deduction you usually earn a little bit more money on that so you're going to enter in how many miles you drove each month one time per month you do that and the final thing is if you hire any contractors to help you if you have somebody helping you with photography on the weekend or somebody helps you put stuff away um you would enter that in if you work for yourself that amount would actually be zero um okay so that leaves you with your total taxable Revenue um and in this scenario it's 24,00 567 so that's the total amount not including sales tax this is the amount that the IRS reports and um that's what you're on the hook for so in this example adding up all of my expenses it's $1,521 1515 this $105 15 is what I would have to pay uh state and federal income tax on so again I'm not a CPA but but this is the breakdown of how it would all work and it's pretty straightforward right I think that you should be able to get your bank account and your credit card statement and your eBay Bill and do all of this in less than five minutes per month I recommend doing it on the first get yourself a kombucha and knock it out in a few minutes doesn't take very long now the reason why people don't do this is they don't take the time to set up a separate bank account and a separate card where all their expenses are and they don't get a receipt book that they can keep track of their cash trans transactions and they don't set up time with a CPA so it's pretty straightforward getting your taxes in order doesn't take very long also if you are behind don't worry call 1800 accountant and ask them what to do in your situation it's actually not too complicated to get back in order I've talked to the IRS before talking about my own personal taxes they've been extremely helpful I've had nothing but good things to say about the tax man and again I know a lot of people are trying to avoid tax but I think you should do this by the book because just five sales to day is $18,000 a year or more and that is like your that's like a maximum 401k deduction so I appreciate you guys um let me know if you have any questions take care [Music]