- This topic has 23 replies, 9 voices, and was last updated 2 years, 8 months ago by
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Hey everyone. Happy new year! Am I correct that Ebay considered taxes collected from Buyers as Income for sellers? Can that be written off as an expense?
Also, can anyone recommend a simple spreadsheet that my math adverse mind can actually use to keep track of mynumbers?
Thanks! Liz catmom
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I’d like to hear other answers. I dont think eBay sees sales taxes as income since it never hits our account.
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For a spreadsheet, I really like EasyAuctionsTracker and have been using it for years. It links to eBay to allow you to download 90% of the data you need in a single click. It can only pick up like 60 or 90 days back in a download, though, so it’s too late to use it for 2021.
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Thanks for the responses! I got tripped up this past year because I was confused about the sales tax. I am trying to do better this year. I am trying out a way to process the Final Value Fee taking into account that ebay now charges different percentages for different categories.
I am terrible with math and worksheets so maybe i shouldn’t DIY it anymore with my simple google doc spreadsheet. I;ve been considering Easy Auction Tracker… maybe now is the time after a couple of years of me trying to do it all on my own.
Thanks! liz
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If you have been on managed payments all year you can get all the data for the year by doing a transactions report.
you’ll get all of your sales, shipping paid by buyer, eBay fees, etc.
it’s under payments you can get it all, not under reports.
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Retro, I know you finished your taxes. We’re about to start on them.
Did you run into any issues with eBay info? Were the numbers all easy to deal with so you could break out your profit/shipping?
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Yeah all the eBay stuff still
comes through to godaddy fine with the exception of item descriptions or item numbers. I use the eBay transactions reports to double check everything and to link actual items to everything.
i also use the transactions report to do my COGS.
godaddy on the PayPal side is a mess. I get a BUNCH of duplicate info without any reference on PayPal. I basically toss all PayPal transactions in the trash on godaddy.
my Amex cardautocategorizes and feeds that info to godaddy and it is really, really WRONG!
I have to go through every single expense and reassign categories.last year it was a nightmare. This year it was pretty straight forward and didn’t take long at all since I was organized with receipts and was on managed payments all year.
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Can easy auction tracker handle multiple eBay stores (I have 2). What about Bonanza?
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I’m looking at their website right now, FAQs section. It says upto 5 Ebay stores can be added on one spreadsheet. They also have instructions for adding details about sales on other platforms but I’m not real clear on the process.
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Retro Treasures- what do you mean you use Transaction report for COGS? Don’t you keep track of COGS in your own bookkeeping as an expense at the time you buy something? I don’t wait to sell something to deduct what it cost.
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It sounds like you, Castle Rock are using the Accrual method of accounting and Retro Treasures appears to be using the Cash Basis method. Whichever method you use determines whether you expense the inventory costs at the time your purchased it or at the time it was sold. Neither method is wrong.
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Correct – I do not realize COGS until the item sells. You do still have to keep track of your COGS. It is up to you how you do it. There really isn’t a right or wrong way. You could keep a running track count of items and total spend and just average out your COGS per item. You could get really complicated and keep a detailed spreadsheet of every item on a separate line.
Bottom line is you need to have a system.
My system is I do a transaction report and add a column for COGS and where I bought it from. If I ever get audited I have my receipts to which I can match up line items to receipts. Is my system the best? Nope. Is it good enough in my opinion and I feel like I could competently defend it? Yes.
At the end of the day my COGS are so low that it is a minor issue. $4 COGS average vs average sales price of $36. I don’t think that’s gonna raise many red flags with the IRS considering many businesses run a 10% or less profit margin.
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I understand that either way is correct, but I am curious why you would want to track COGS on sales instead of on purchases. Seems much easier to simply count that I spent $2000 on new inventory in 20 purchases this year than tracking COGS item by item and totaling COGS on 300 sales. Considering it could take a year or more for an item to sell, seems like leaving money on the table. But, perhaps I’m missing something. I’m just doing it the way my tax advisor recommended, I never looked into pros and cons of one way over the other.
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For me personally, if I would have done that earlier in my business it wouldn’t have helped me because I already pretty much deducted away my whole business. I was buying more than I was selling too as a strategic plan to build my backlog in case I lost my day job.
Now I am selling more than I am buying so my cogs would be LESS if I just deducted what I was buying instead of selling.
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@Retro – Thanks for sharing this article… I think. From reading this article it looks like there was a short window where writing off COGS in the year you incurred the cost was OK, but the recent 2021 guidance looks like that is no longer the case. One litmus test he uses is whether or not you keep an inventory and assign value to the item in inventory. I definitely do that, so looks like I need to have a conversation with my accountant.
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I guess I am actually mixing methods since I occasionally will sell something “on consignment” for someone (usually a favor and a reminder that no good deed goes unpunished….) and then I am deducting my COGS after the sale in the form of payment to that person.
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OMG. My head is swimming after spending a good portion of the last several days reconciling records for my taxes. They didn’t move me to Managed Payments during the first quarter so I have Paypal and MP records to slog through. Originally thought that GoDaddy had done an OK job, but due to having both systems it was a mess. The 1099s didn’t agree with my numbers so I ended up eyeballing both systems transaction reports. eBays’ are definitely simpler than paypals’ reports.
As I was feeling like I had it all sewn up, I realized that though eBay does not consider the taxes collected in the 1099, Paypal does. Glad I caught that before I sent the records to my accountant.
Nest year should be much easier. I hope.
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Yes, it was madness figuring out things when I switched in the middle of the year to MP. It was further compounded because my AmEx business card started feeding all kinds of bogus category info to godaddy.
My big issue was that ebay once you are on MP, ebay doesn’t send alot of critical info to godaddy that lets you reconcile the two datasets.
I ended up looking at the data completely separately in two spreadsheets and figured it out.
Now I use MP to reconcile my COGS and godaddy to handle all my other expenses including ebay fees. I try my best to reconcile my income between godaddy, ebay MP, and 1099, but they never exactly match by amount or line item and I have no clue why.
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My big issue was that ebay once you are on MP, ebay doesn’t send alot of critical info to godaddy that lets you reconcile the two datasets.
I found myself going back to spreadsheets, also. Even though I import everything into GoDaddy, crucial information is lacking in several situations and frequently doesn’t get categorized properly.
As I see others saying that they are moving from Spreadsheets to applications, I’m leaning the opposite and may consider quitting GoDaddy. The biggest thing that GD has going for it is the automatic downloads. I had two situations where my banks only hold a few months information for download and the only way to get the information was PDF statements. Not good for this type of endeavor.
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