Tax Tips For Ebay Sellers Turning Personal Expenses Into Business Expenses

Tax Tips For eBay Sellers - Turning Personal Expenses Into Business Expenses
Few people realize that starting a​ side-business on​ eBay is​ actually a​ great way to​ save money on​ your taxes .​
The trick is​ to​ make sure you’re putting all the​ additional expenses you​ incur against your additional income .​
Running an​ eBiz allows you​ to​ take numerous deductions that can add up to​ a​ lot of​ savings.
Deduct Your Home Office
By definition,​ if​ you’re an​ eBay seller,​ you​ have a​ home office .​
You have to​ have a​ space that’s used exclusively for business,​ whether it’s in​ your spare room or​ your basement .​
But having this allows you​ to​ take a​ percentage of​ your mortgage interest,​ your utility bills,​ your homeowner’s insurance,​ and your homeowner’s dues as​ deductions against your business .​
And if​ you​ use your home to​ store inventory,​ even if​ it​ doesn’t have its own room,​ you​ can include that space in​ your deductions as​ well.
Deduct Your Children’s Pay
Rather than giving your kids allowances,​ pay them to​ help out with your business .​
You’re moving income out of​ your tax bracket,​ and you​ can pay them up to​ $4,​900 a​ year before they’ll have to​ pay taxes on​ it .​
Tax strategist Diane Kennedy,​ of​ TaxLoopHoles.com,​ says there are three rules to​ employing your child:
1 .​
Have some kind of​ written job description.
2 .​
Make sure they’re keeping track of​ the​ time they actually work.
3 .​
Pay them a​ reasonable wage.
Says Kennedy,​ Take a​ look at…personal expenses and how they could become business expenses .​
Things like employing your kids,​ having a​ home office,​ maybe your car you’re using to​ run errands—look at​ all the​ things you’re spending money on​ now that could become business deductions.
How to​ Protect Yourself
You need to​ be able to​ prove your deductions are legitimate business expenses,​ so it’s crucial you​ keep good paper work on​ everything .​
Track where your money’s coming from and what your costs are,​ and have documentation to​ back it​ up .​
Should the​ government ever have questions,​ you’ll be glad you​ did.
Good record keeping will go a​ long way towards satisfying the​ IRS .​
But you​ can lessen your chances of​ getting audited in​ the​ first place by forming a​ corporation or​ an​ S-Corp .​
If you​ default to​ a​ sole proprietorship,​ you​ have a​ one in​ twelve chance of​ being audited .​
Incorporating also gives you​ certain tax advantages.
When done properly,​ selling on​ eBay allows you​ to​ save money on​ the​ back end with taxes .​
As Kennedy says,​ So many people don’t realize that just by having this little side business,​ they can actually immediately start paying lesser taxes .​
In fact,​ we say ‘eBay tonight and pay less taxes tomorrow.’
Tax Tips For Ebay Sellers Turning Personal Expenses Into Business Expenses Tax Tips For Ebay Sellers Turning Personal Expenses Into Business
Expenses Reviewed by Henda Yesti on July 03, 2018 Rating: 5

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