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Does anyone have a list of what you need to set up a “proper” eBay business? Such as:
1) separate paypal account
2) resellers license
3) separate bank account
4) separate credit card
5) Go Daddy bookkeeping account
6) accountant/tax preparer
etc….
What else would you add to this list? -
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need some guidance as I go through these steps. Generally speaking I want my Business to be up and legal by January 1st. I am currently listing items.
1) separate paypal account
I have one paypal account, it is attached my my personal bank account. I have yet to have any sales, is it okay to keep it this way? Should I set up something totally seperate?
2) resellers license
How do I know if my state(IL) needs this?
3) separate bank account
Kind of touch on above. How does this benefit me? Should I speak to my bank about my new business?
4) separate credit card
same as 3
5) Go Daddy bookkeeping account
Is the simple $3.99 a month enough or do you suggest a higher level?
6) accountant/tax preparer
Is there a special type of accountant one should look for online selling/small business? How soon do I need to get one?
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I want to know what exactly GoDaddy does that is more efficient/effective than downloading your PayPal year report of all transactions. I am trying to decide on whether I need GoDaddy or not. I could see it would be helpful if you used your PayPal for multiple things like personal use or Amazon. Since I only use PayPal for Ebay transactions I can just look at my PayPal report CSV and see every item I’ve sold including fees, shipping, and store subscriptions.
I can’t believe I’m just now learning about these two things:
1.) On day one of selling (unless you don’t plan to be doing this as a business), setup your State Sales Tax. You setup through Ebay however you need to also get a license through your state. Some states don’t have it. Mine does. I should have been charging an additional 7% to my customers who are in the same state as me.
2.) You can get a certificate where you don’t pay the 7% sales tax on your receipts at thrift stores! Meaning, you fill out a form and send to the government stating that you are a reseller. You don’t pay the 7% sales tax on the sweater you buy at Goodwill! Unbelievable! This might be that resellers license talked about by the original poster.About accountants. I personally can’t find a good accountant familiar with eCommerce. I am approaching the point where I can do my own taxes and do not need a CPA. If you do a simple buy and sell on Ebay business, I suspect a CPA is overkill depending on how many hours you can devote to learning about taxes. All you need to know about is form 1040, schedule C, schedule SE, and pay your State Sales Tax.
I hope in the future someone can write a Tax Guide For Ebay/Amazon and sticky it to this forum. Such a guide doesn’t exist yet on the sources I know of.
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Fred – I tried Go Daddy bookkeeping briefly. The advantage is that it can pull your sales and all your fees into one place which lots of people find useful. You still need to account-for / enter your COGS ad all your other non-ebay related expenses. Since I already track everything in a spreadsheet, I didn’t find it that useful. Many people do. I’d suggest trying it for a month to see whether it’s useful.
One thing that’s missing on the original list is a business license which may be required by the city or county.
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For people like me, who have only eBay transactions on their PayPal account, you can download all transaction info from a time period of your choosing. I think you can even make it so that it gives you a monthly report or weekly via email automatically. This will give you all revenue, fees, and shipping cost in a spreadsheet file. This is essentially your selling end info.
On the buying end, I have always manually kept a spreadsheet of all expenses and cost of goods. It now even keeps track of my mileage. I do a cost average method for my COGS, which is simple. Everything I do in my business I keep simple and reduce overhead to near zero.
I am waiting for my ID number from the Dept of Revenue but I paid the cost of $25 to get it Thursday. I think this counts as registering my business. What I wasn’t sure of is if it counts for registering for sales tax or not. I am just trying to do the steps it takes to get a re-seller sales tax exempt cert for use at my Goodwills.
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This will be my first year filing taxes for eBay sales, just wondering about how different people handle their sales tax?
1) Do you include it in your eBay settings to charge it for buyers in your state?
2) or do you not charge it to anyone, but figure it out later from sales within your state?
I don’t think I’ve ever been charged sales tax when buying from anyone on eBay, and I’d consider it a bummer if I did, since it would raise the price of the item from what I thought it was. That’s why I’d like to just figure it out later, when I need to pay and just eat the tax for my in state buyers.
I don’t have a resellers license, from what I’ve read, despite the advantages, I don’t think I’m going to get one. Does this have an impact one way or the other how you collect/report your sales tax?
Thanks very much for any feedback.
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I can speak to what I did in my state of NJ. I registered my business in the state, and then registered with the Division of Revenue for resell/tax exempt status. It also gives me the authority to collect taxes. I registered as an LLC, but you could register as a sole proprietor. I registered online, and it was very easy.
Since I buy the majority of my items at auctions within NJ, either live or online, it was in my best interest to not have to pay taxes on my purchases. Then, I have eBay set up to collect NJ taxes only. From what I researched, I only have to collect taxes in the state where I have a “presence”, which, of course, is my NJ house. When I collect tax, I have to collect on the total, which includes shipping.
I don’t know whether you can collect tax without being registered. You would have to look at up. If you buy the majority of your items at garage & rummage sales, then perhaps you don’t need the resale certificate. It’s not a big deal to get one. Paying taxes has been easy as well. I use GoDaddy to find all the NJ tax I collected, and then I look up the prices for those items. I ran into one glitch where NJ had a small decrease in the sales tax at the beginning of the year, and I collected a slightly higher amount of tax for a few months. I know that there will be another one at the begging of next year, so I will be prepared this time.
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Thank you for your feedback @Sharyn!
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At one time, while buying things at GW for a friends re-sale store, I used her “sales tax free-reseller” letter from the state. Each time I used it, the cashier did not know what to do and had to call in a mgr.-usually a 5-10 min delay in checking out. After about the 8th time, I decided it was not worth the hassle to just save the 7% sales tax.
Maybe the cashiers in your area are smarter than mine……….
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I only have my sales tax exemption on file at the local Savers because I buy there a lot. The paper is in a huge notebook they keep under one of the cash registers. I try to get in a checkout line where the manager is working because he knows me by name and knows exactly where to find my page. It’s well worth it to me to save almost 8% on what I buy. Of course you don’t need one for places like church sales, garage sales, and many auctions.
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