31 TAX TIPS for 2023
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- Опубліковано 28 чер 2024
- The new year is coming at us quickly! This means 1099s, more IRS, and more taxes. You need to be prepared by educating yourself!
Reseller Tax Academy: www.resellertaxacademy.com/
Spreadsheets: notyourdadscpa.com/inventory-...
• 1099 video: • New 1099K thresholds! ...
• Can I deduct my inventory when I purchase it?: • Can I deduct my invent...
• How to deduct personal items video: • How to deduct PERSONAL...
Timestamps:
00:00 Introduction
00:18 Get a separate bank account
01:22 Find a bookkeeping system that works for you
02:05 Determine your optimal business structure - SP, LLC, S corp
02:51 Learn about the Sole Proprietorship
03:39 Learn about the LLC
04:40 Learn about the S corp
06:17 Track your activity, not just for taxes, but to build your business!
06:53 Do I need receipts?
07:53 Hire vs. DIY - Decide who will do your taxes
08:37 Learn about how directly taxes impact your life & goals
09:17 Self-employment tax vs. income tax vs. sales tax
10:13 What are quarterly estimated taxes?
11:17 Sales tax for online sellers
12:34 Hobby vs. business
13:03 New 1099 rules and 87K new IRS agents
14:00 How to deduct inventory (accrual vs cash method for inventory)
15:15 Cost methods to calculate your cost of goods sold
16:06 Be alert for scams
16:38 Understand the difference between “tax planning” and “tax preparation”
17:36 Review your business situation with a CPA
18:03 Deducting Donations
18:45 How to account for consignment sales
19:37 How to take the home office deduction
20:36 How to deduct mileage
21:18 How to deduct your cell phone and internet
21:51 Travel - How to partially deduct your vacations
22:35 Do I have to depreciate large purchases?
23:28 Avoid late penalties
24:28 Getting audited - should I be worried?
25:20 Assess your profitability
25:47 Educate yourself & take action!
1) SUBSCRIBE to learn how to get a handle on your business!
/ @notyourdadscpa
2) FREE GUIDE: "Business Starter Guide for Resellers"
notyourdadscpa.com/business-s...
3) COME JOIN THE FREE GROUP!
Accounting for Online Sellers free Facebook group: / accountingforsellers
4) READY TO DITCH THE TAX ANXIETY?
Reseller Tax Academy: www.resellertaxacademy.com/
Bookkeeping Basics for Resellers: notyourdadscpa.com/bookkeepin...
Reseller Finance eBook: notyourdadscpa.com/reseller-f...
5) LET'S CONNECT!
Follow for tips on Instagram! / notyourdadscpa
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6) NEED TAX HELP? Join my waiting list here:
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Dude thank you so much for this comprehensive video; it really is a blessing.
Mark is our reselling taxes HERO!!!
This is one of the best videos on youtube for ebay resellers. Awesome job.
HELP! - I'm a very small time reseller. Have never tracked inventory. So, for the first time ever, I'm filing as a Sole Proprietor on my husband's and my joint taxes. The thing that I cannot wrap my head around for the life of me is inventory. If I'm understanding correctly, I need to have known Years start inventory, inv. purchased in 2022 and remaining inv at years close? Answer I have absolutely no idea. All I know is what I have now and no clue what I've paid. Dumb? Yes but I've always been tiny. Unfortunately, it will be same story for 2023's taxes but 2024 I hope to begin like a real business person ought to. Have alot to yet learn. My question - How in the world do I estimate any of the 3 inventory totals needed? I'm so overwhelmed.
Oh how helpful this video is! This is my first year reselling and I was stressed out about tax season. I found on eBay that they actually kept track of all sales for the year, including ebay fees. The only thing I need to add in is the COG sold.
Thank you so much Mark for your expertise!
Mark, you are so good at explaining things and not causing any anxiety. I really appreciate your videos. Have a Happy New Year!
best video I have seen soo far from any accountants Thank You so much
I am surprised that you never mention my reseller Genie! That program has definitely helped me tremendously, and it is awesome because it’s geared toward resellers
Hi Mark! Thank you for making this very helpful video! I so appreciate the calm and clear way you explain things. Thank you for all the ways and times you have helped me with our taxes!
So helpful!
Thank you Mark!! This is the best!
Great video, thanks
THANK YOU!
Great info packed video!
Thanks for the detailed, easy to understand video. Happy New Year!
So much value in one video, thanks!
Very helpful! Thank you so much for your selfless willingness to continue to educate and help us resellers! Posh is my livelihood, I was deemed disabled by a judge but SS said “I had $27 too much in my account,” and was thus denied SSI, & denied SSDI - the irony of not being able to hold a job long enough & being denied the $ I paid into since I was 16 for disability was another punch to the gut. Four shoulder surgeries since 10/2020, no help from state or federal to not worry how I’m going to pay bills while I recover, basically has left me in limbo: i will continue to need surgeries for the sheer fact that I simply cannot not work & rest/heal.
So im in chronic debilitating pain 24/7, and what I consider full time is probably a joke to most. I made around $7500 this year, but that doesn’t include my losses (more than half were mine or my mothers items I sold for a loss and never kept receipts for, especially the vintage pieces), COGs, having to buy a new iPhone because my iPhone XR finally stopped working, having to buy a ring light and go on a mission to find daylight light bulbs that are legal to purchase in California, monthly battles with spectrum over internet and their ability to cause more distress than help and actually fix the 8-year-long problem, etc.
I don’t even know if I need an accountant…I can’t justify the cost of one because I don’t even make much. I’m barely making enough to pay monthly bills…
I do keep spreadsheets, I like to stay organized…but what I entered for my ending inventory, I can’t find. I call TurboTax and after an hour of holding, I finally get a rep…who didn’t know either and simply hung up on me. I filed an extension for 2021 hoping to find a number, never did and never filed (I only made around $500 selling my own items i didn’t even want to part with but had no choice if I wanted to pay my bills) and had surgery #4 around the time the extension was expiring. I don’t have any valuable assets, stocks, savings, etc.
So now I’m over here wondering, will I get audited if I enter a number I took a best guess on when entering what I started with in inventory, and what I ended with? Ended is what I still have or what I sold?
Sorry for the lengthy comment, I’m just anxious and don’t know where else or who else to turn to.
Great information, thank you for sharing!
Great to-the-point content. Appreciate it. Liked and subscribed
great video thanks for all the great info
Great video. Thank you.
Great info in clear terms. Thank you so much!
Been watching for a year now & appreciate the tips. Been dealing with vintage for a few years & definitely going to look into adding another checking account to better track expenses etc Thank you!
As always thanks.. you been very helpful for resellers.
Best one so far. Happy 2023
Wow! Thank you so much for making this video. It's my first time doing taxes and I want to make sure I do it right. This information helped tremendously. Thank you again! - Koko
Thank you.
Your videos are the best on UA-cam! Thank you for your time!
This was great. Thanks!
Awesome video, Thanks for using terms we all understand and speaking our "language"
I extremely like the video, man. Very helpful and informative. Thank you very much. It is presented so well too. Great, positive work.
THANK YOU for answering so many questions most of us have. This is very helpful!
This is an incredible wealth of information for small businesses, especially resellers like myself. 2022 was my first year in business, and figuring out all of this new (to me) tax information has been overwhelming (to say the least..), but your videos are some of the most concise and helpful I've found so far. thank you so much!
I Appreciate your advice ❤Thank you😀
Since the irs has said they won’t enforce the 1099-k thing ‘for now’, should we still include it in our 2022 taxes if we receive it? Thanks!
You answered so many questions. Thank you so much.
Wow, thank you so much for explaining all of this so that I can actually understand it!
Faith comes from knowledge. Thanks for all the interesting information !
Found your post interesting to watch. I can't wait to see your new videos soon. Good Luck with the upcoming update. This UA-cam channel is really very informative and effective.
Oh my gosh thank you I’m going back and rewatch this everything I need to know is that my fingertips now thank you again
wonderful! i actually understood taxes while listening to this vid!😂
I'd like to understand the benefits of doing a DBA and not sole proprietor, if any. Do you have content on this? So glad I found you ❤️
Wow, this was awesome. You made everything so easy to understand. I have been in business as an Scorp for 8 years and could never understand inventory. My CPA could not explain it to me and every year I am left with a mess. Thank you! I am hooked.
Time to get a new CPA
Good video. #15 has been delayed for one year.
Yes they waited until the last minute! Here's an update ua-cam.com/video/6_HMfeJcIXw/v-deo.html
Thank you for your helpful videos! I'm getting contradicting answers to a question I have and hope you can clarify for me. We built a separate structure on my property for my Ebay business ourselves. How do I claim the material costs? Is it a deduction or an asset? The materials were not purchased all at once so it was many purchases over the year totaling about 12k. Thank you for any help you can offer!
If you don’t pay yourself, you don’t pay self employment tax. All proceeds from my company, a LLC, (sell in eBay, Amazon, Mercari, and whatnot) are reinvested back into the company; I take no salary (retired & VA disabled vet & wife has high paying job, so I can afford to not pay myself). I use turbo tax, no problems. The deductions/losses I’m able to take for my business helps offset our tax liability by quite a bit.
Saying that business expenses are "deductions" is often confusing to those who don't know taxes, and they will assume that if they are taking the standard deduction, they can't reduce their business revenue by their business expenses. For this reason, I never call them deductions.
What do you call them then?
Update on Tip #15 - the lower threshold has been delayed to 2023! More info here: ua-cam.com/video/6_HMfeJcIXw/v-deo.html
I haven't even heard a peep from Mercari on what their plans are. In fact, a banner on the active listings page was added to the website recently: "Get ahead of taxes. To sell more than $600 in 2022, you’ll need to provide W-9 taxpayer info. Get ahead by completing it now." So sellers on Mercari may still get it!
My guess is many still will receive them because the companies are large and likely can't respond quickly enough.
And now there are so many states with a lower reporting threshold than federal this year I think it’s up to 10 states plus DoC with lower thresholds
@@therealjenniferrr have you found out, anymore information?
@@SayItKey ya Mercari sent out an email a few days later stating they are going with the old way, unless your state has a lower threshold prior to the new law (some do).
Thank you!!! These tips are very helpful!! I have a consignment question. Can you record what you payout as cost of goods vs commission?
It might not be the technically correct treatment, but in practice that's probably what most do, and at the end of the day you'll show the same taxable profit, so the IRS won't likely have a problem
Thanks so much for the great video. I had everything on Go Daddy Bookkeeping. I am now trying to find out my IL sales Tax. Ebay does give me a TOTAL Collected figure for Sales Tax for 2022, but----I need to know specifically how to capture ONLY the Illinois Sales Tax Collected and IL State Sales figures. Please help me out. I am lost.
Free tax USA online is better than Turbo Tax or H&R Block.
I've used it a good 10 years for myself & my sons.
Hi Mark, Firstly thank you for the ease and peaceful way you in which you teach and guide through this incredibly stressful tax process. Hopefully going through it for 2022 will make it a lot easier in 2023.
Must I give ThredUp my SSN? I get emails from them asking for my personal info yet I can’t find anywhere within their site to provide it. This makes me leery and uncertain. I don’t know where to go or who to trust.
Many thanks and blessings,
Lori
They require your SSN because they are required to send you 1099-K if you exceed the threshold. If it's coming from ThredUp then it should be fine.
@@notyourdadscpa Thank you another issue their portal doesn’t direct me to a place to provide my SSN. I keep trying to connect with them but their electronic employee does not respond. Will keep trying. Thank you for letting me know responding to them IS right and safe.
Thank you so much for all your videos! If I follow the cash method, and I've expensed the cost of items then decide to donate at the end of the year, how do I back that out of my bookkeeping?
When you donate inventory, you get to deduct the original cost. If you use the cash method for inventory that means you deduct the cost when purchased. So you just have to make sure you don't deduct it twice.
#16 Cash Method for inventory. I will be just a small seller and want to do this method. I want to start selling soon. I have two questions
1. Actually where or how do i claim inventory on my tax forms?
2. I bought tons of plush about 3 yrs ago but never tried selling. I have all records/ receipts. Is it too late to do cash method inventory for them?
Thank you for your help
Question I'm using your spreadsheet for my items sold should I include the customer tax paid under seller fees and also include the fees and tax under what the items sold for?
Mark thanks for the free inventory tracking sheet1 I have a question - do most people use the SKU column for their custom sku inventory location or for the item number? If for the # can a column be added for the custom sku/inventory location
Can’t find the inventory tracking sheet
I set up my business as a C Corp with an S Corp election at the beginning of 2022. Had I done more research beforehand, I likely would have opted for an LLC with an S Corp election as it seems much more simple and slightly cheaper to maintain. Are there any advantages to being Incorporated vs being set up as an LLC that I should know about?
Simplicity would be the main benefit!
I’m a part time reseller that almost entirely uses the profits of reselling I make towards supporting my collection hobbies, Essentially I use the eBay “spendable funds” and make purchases within eBay’s marketplace and rarely do I ever send any of that money to my bank account, do you know how spendable funds works in regards to taxes?
Thanks for this timely vid… this is very overwhelming. I have a big closet full of NWT clothing, accessories, and NIB shoes purchased over the years that I am looking to sell.
How do I handle ‘cost of goods’ for my bookkeeping? Do I estimate, or dig through a huge box of receipts and find the actual cost of each item? I already paid taxes on these purchases, so isn’t it being taxed twice when I sell it?
You would just use whatever records you have or your best estimates. And yes you don't want to double deduct anything so you would only include it as a deduction if it hadn't already been deducted in years past. You might not be able to get 100% accuracy but the closer you can get the better.
Thank you sooo much this hepls some...
I have a question if this is not allowed i apologize.
My id and primary residence is in n.y but i been in puerto rico for the past couple of years taking care of my parents. I started reselling the last week of December 2020. My posh and ebay have the p.r address will this be a problem? I know i saw something about a foreign exception or something to that nature i forgot the name. I jus dont know how to go about doing my taxes. Ive been unemployed for many years due to taking care of my parents so it alittle overwhelming.
THANK YOU AND YOU ARE A GOD SEND TO PPL WHO NEED TAX ADVICE
It doesn't seem to be in our best interest to use an average cost of goods from a sourcing trip, if you are using the accrual method. Curious about your stance on average cost of goods versus actual cost for tax purposes.
For the first 6 months in 2022 the mileage rate was lower (like 58 and something cent i think) so we would take that for the first half of the year and then the increased rate for the second half of the year, correct?
What about yard sales? We generally don’t get receipts. Should we track how much we spent on the day we go to yard sales?
Amazon video!
Do you do taxes for gov stipoend too?
18:51 🤝😂
Why do we need to categorize deductions? Are the categories standardized?
Let’s see if the IRS doesn’t make a mid December decision again this year 🤦🏻♂️
Hi, I have been a hobby reseller for a while. Last year I did not sell on eBay as I had a new job teaching. I'm now listing items again. Most of my items were purchased in the past & I don't remember what I paid for them. I also have items that I've owned & will list. Question: How do I show these items on a spread sheet?
A very relevant Q for me too.
I have a closet cul of NWT clothes and shoes for which I paid quite a bit and paid sales tax. So cost of goods not a $0. If I’m paying taxes on sold items, am I not getting taxes twice?!
I have always had places like jackson Hewitt or h&r block do my taxes before i started reselling on ebay this year. Is a cpa a better choice or is it still ok to deal with them? I like that they have programs that i pay a little extra for to supposedly deal with the irs for me if needed.
There's nothing super complicated about a reseller tax return, but even still many tax preparers feel uncomfortable because they are unfamiliar with the space. If the person you are dealing with right now is comfortable with it, then you are likely okay. It can be hit or miss so it's hard to generalize.
If your ending inventory was around 6k in 2021 then your beginning inventory in jan 2022 would be 6k plus whatever else you purchased that month? Or does it start at zero?
Beginning inventory will equal the prior year ending inventory. Dec 31 = Jan 1
How would sole proprietorship deductions work with the 12k standard deduction? Is it a separate form?
Yes the standard deduction is separate from the business deductions. After you deduct your business expenses you get your taxable business profit. That profit is what can be reduced by the standard deduction, but only for income tax purposes. Self-employment tax is still charged on the full business profit.
Hi Mark, Could you help to answer this question? Would you set up separate bank account and credit card if you have multiple business?
You don't necessarily have to, especially if they are sole proprietorships. It's partially a matter of personal preference. If they are LLCs then it's not a bad idea.
@@notyourdadscpa thank you!
Hi Mark, I need to file my taxes and wondered if you are taking on new clients for this?
Yes, just shoot me an email!
If they don’t have a business, how could they provide me with a 1099 for consignment sales if I’m the consignee? 19:35
QUestion...I want to sell many of my own stuff (lots) in online website or maybe do a utube account...however if I sell those items to people from different states how do i collect taxes if each state have different rates? If local I know the sell tax rate..but that applies to all my personal items such collectables, clothing..furniture...I am doing a live estate sale...
Check out my sales tax video. You would likely only need to collect sales tax on the sales to customers who live in your same state.
@@notyourdadscpa thank you for answering my question...appreciated
Where is the link for your spreadsheet?
notyourdadscpa.com/inventory-tracking-spreadsheets/
This may sound like a stupid question, this is my first year filing taxes as a reseller. I didn't do a lot in sales, but i used my own personal bank account for everything; purchasing inventory and paying personal bills. Will this affect me? When I create a separate bank account, how do I use those funds to pay personal bills? It's all so confusing to me..
That's okay as a sole proprietor, but for bookkeeping purposes it's just easier to have a separate account. And when you need money to pay personal bills you just do a transfer from the business account to your personal account.
@@notyourdadscpa thank you for what you do! You're making all this filing less stressful, I had so much anxiety when I started filing and have learned so much from your channel 🙏🏻
Hi Mark. The total gross sales on my 1099-K is around $1,000 higher than the sum of the monthly gross sales in my monthly sales reports that were all generated by Poshmark. I asked Poshmark why the discrepancy but I just got a general response. What do you recommend I do? I don’t want to pay taxes on the extra $1,000 that I didn’t make. Love your videos btw.
I always trust my numbers more than I trust theirs, which is why bookkeeping is so important. Their number can be inflated with sales tax, returns, and other stuff. If they over report then you have to at least match that number on your tax return but then deduct the difference between their number and yours 👍🏻
Mark, thank you for the quick response. But how do I deduct the difference? There isn’t a line on Schedule C for 1099 corrections.
@@Julie-kp6sz You just have to choose a line - I typically put it in the returns/allowances line
Thank you!
Mark, just wanted to let you know that Poshmark sent me a list of every transaction for 2022 which shows their total figure. I compared this with my monthly reports and found the problem. Their gross sales figure includes all of the cancellations which are not in my monthly reports. That’s why there was a large discrepancy.
The $600 rule. Is that a min on every platform? If I sell less than $600 on 3 out of 4 platforms, do I still claim that sales from those 3 platforms?
You would claim all the sales regardless of whether you get a 1099-k. But a platform won't send you a 1099-k unless you exceed the threshold on that specific platform.
do you have any videos explaining how to turn your resell business into an S corp? i just got taxed really hard on 60k Net due to the 15% Self employed tax. THAT WASNT FUN
Not yet but I'll add that to my list!
I've always heard that you can file your taxes for free but I've never found any service that does it for free. There's always a charge in the end.
Yes TurboTax got in big trouble for misleading advertising for that very reason. It depends on your income level. You can try here: www.irs.gov/filing/free-file-do-your-federal-taxes-for-free