For those who are not familiar, I started a series a while back called Turnover Tuesdays. Every Tuesday I like to highlight one item that I have resold. This will include profitable and non profitable sales. I hope that there is always something to learn.
The previous posts in the series can be found at the bottom of this post.
Week 1 - First attempt at reselling
Week 64 - The Buy Box
Week 65 - Amazon Restrictions and the Future of Selling on Amazon
Week 66 - Fun with Inventory Reimbursements
Week 67 - Q4 Storage Fees
Week 68 - Start Your Own Listings
Week 69 - A Long Tail Sale and Calculating Storage Fees
Week 70 - Prices Always Come Back Except When They Don't
Week 71 - Past Performance is No Guarantee of Future Results
Week 72 - Automation Beyond Amazon
Week 73 - Some Quick Holiday Tips
Week 74 - Update on Miles vs. Cashback Opportunity Costs
Week 75 - Pricing for the 4th Quarter Madness
Week 76 - Returns, Returns, Returns
Week 77 - Reimbursement
Week 78 - Q4 for Accelerated Inventory Turnover
Week 79 - How it is Going Outside of Amazon
Week 80 - 2017 Goals
Week 81 - I've Violated All of My Rules
Week 82 - When You Are That Shady Seller
Week 83 - January is part of Q4
Week 84 - My Returns Will be Inspected By Me
Disclaimers
Now that it is 2017, it's time to talk about taxes a bit. I'm not a tax expert and I'm certainly not an accountant. My goal is not to create a comprehensive list of business expenses you may have. Hopefully I can mention some things that others hadn't thought of, maybe others can come up with ones I didn't think of.
Please talk to your accountant before you decide to take any deductions. I have an accountant and I've asked about all of these but not every accountant is as aggressive about deductions as other accountants.
Hopefully this is the beginning of a conversation that is beneficial to everyone.
Business Expenses
There are tax deductions that everyone should take and there are tax deductions that are more gray areas. For purposes of this discussion I will assume you have Inventory Lab which will accurately collect all of your fees like refunds, removal orders, disposals, shipping to Amazon or purchased via Amazon. I will add the couple that are less obvious in case someone does not have Inventory Lab
1) Expired merchandise. If your merchandise is expired and you can't return it, that is a cost to your business. That won't show up in Inventory Lab.
2) Business insurance - Everyone who has a professional seller's account must have business insurance.
3) Costs associated with your home. If you operate your business out of your home, part of the costs of your home are business expenses including rent/mortgage, phone, internet, electrical, repairs, new computer, new printer, etc. The exact breakdown of costs that are attributed towards personal vs. business expenses is a great question to ask your accountant.
4) Car expenses. If you use your car for business expenses, some of those expenses are deductible as well. Car insurance, car purchase/lease payments, gas, tolls, repairs, etc. Alternatively, many people will keep track of their mileage used for business expenses and deduct based off that.
5) Amazon $40 monthly professions subscription fee. If you have Inventory Lab they will automatically add this to your fees.
6) Shipping supplies. Hopefully you don't have to buy too many boxes (though I buy a lot of boxes for shipping efficiency) but you will definitely go through a lot of tape no matter what.
7) Fees associated with incorporating your business
8) Fees for services. If you pay a service to Pack and Ship or autoprice or Joe Lister or Inventory Lab, those fees are a business expense.
9) Fees for private groups. If there is a fee for membership in a reselling group, that is a business expense
10) Credit card annual fees. If it is a credit card you use for your business, the annual fee is a business expense. If you use it for business and personal purchases, you should probably stop doing that for bookkeeping purposes but you might want to talk to your accountant about the annual fees.
11) Credit card convenience fees. When I pay my sales tax bill, NJ state charges me a convenience fee to use a credit card. That fee may be a business expense.
12) Retailer subscriptions - If you have a prime membership which you use for reselling purposes (might not want to do that), that fee should be a business expense.
13) Vacations - when I go on vacation I make a point of going out to a store to source. If it is a business trip, you may be able to deduct your hotel, transportation, food, etc.
14) Retirement accounts - between now and April 15th is the time to think about funneling some of your business profits into retirement accounts. If the government is effectively given your a discount on your contributions with your marginal tax rate, you have to consider that. It's not a business expense but it can significantly help your tax bill.
What did I miss? What deductions are you taking?
1) Expired merchandise. If your merchandise is expired and you can't return it, that is a cost to your business. That won't show up in Inventory Lab.
2) Business insurance - Everyone who has a professional seller's account must have business insurance.
3) Costs associated with your home. If you operate your business out of your home, part of the costs of your home are business expenses including rent/mortgage, phone, internet, electrical, repairs, new computer, new printer, etc. The exact breakdown of costs that are attributed towards personal vs. business expenses is a great question to ask your accountant.
4) Car expenses. If you use your car for business expenses, some of those expenses are deductible as well. Car insurance, car purchase/lease payments, gas, tolls, repairs, etc. Alternatively, many people will keep track of their mileage used for business expenses and deduct based off that.
5) Amazon $40 monthly professions subscription fee. If you have Inventory Lab they will automatically add this to your fees.
6) Shipping supplies. Hopefully you don't have to buy too many boxes (though I buy a lot of boxes for shipping efficiency) but you will definitely go through a lot of tape no matter what.
7) Fees associated with incorporating your business
8) Fees for services. If you pay a service to Pack and Ship or autoprice or Joe Lister or Inventory Lab, those fees are a business expense.
9) Fees for private groups. If there is a fee for membership in a reselling group, that is a business expense
10) Credit card annual fees. If it is a credit card you use for your business, the annual fee is a business expense. If you use it for business and personal purchases, you should probably stop doing that for bookkeeping purposes but you might want to talk to your accountant about the annual fees.
11) Credit card convenience fees. When I pay my sales tax bill, NJ state charges me a convenience fee to use a credit card. That fee may be a business expense.
12) Retailer subscriptions - If you have a prime membership which you use for reselling purposes (might not want to do that), that fee should be a business expense.
13) Vacations - when I go on vacation I make a point of going out to a store to source. If it is a business trip, you may be able to deduct your hotel, transportation, food, etc.
14) Retirement accounts - between now and April 15th is the time to think about funneling some of your business profits into retirement accounts. If the government is effectively given your a discount on your contributions with your marginal tax rate, you have to consider that. It's not a business expense but it can significantly help your tax bill.
What did I miss? What deductions are you taking?
Week 1 - First attempt at reselling
Week 65 - Amazon Restrictions and the Future of Selling on Amazon
Week 66 - Fun with Inventory Reimbursements
Week 67 - Q4 Storage Fees
Week 68 - Start Your Own Listings
Week 69 - A Long Tail Sale and Calculating Storage Fees
Week 70 - Prices Always Come Back Except When They Don't
Week 71 - Past Performance is No Guarantee of Future Results
Week 72 - Automation Beyond Amazon
Week 73 - Some Quick Holiday Tips
Week 74 - Update on Miles vs. Cashback Opportunity Costs
Week 75 - Pricing for the 4th Quarter Madness
Week 76 - Returns, Returns, Returns
Week 77 - Reimbursement
Week 78 - Q4 for Accelerated Inventory Turnover
Week 79 - How it is Going Outside of Amazon
Week 80 - 2017 Goals
Week 81 - I've Violated All of My Rules
Week 82 - When You Are That Shady Seller
Week 83 - January is part of Q4
Week 84 - My Returns Will be Inspected By Me
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