Tax Breaks For Your Home-Based Online Sales Business
The time and effort that you put into selling things on online auction websites is valuable. That time and effort should be rewarded. Sadly, those websites charge you fees, the gas to go out and find the things to sell costs money, and the products that you sell cost money. Wouldn't it be nice if you could recover that lost money? Well, come tax time, you may be able to do just that. Below, you will find a list of things that you should track through the year so that you can claim them as business expenses on next year's taxes.
Home Business Deductions
Build yourself a little home office to do all of your work in. Even a small room can account for a nice tax break at the beginning of the year. A portion of your mortgage, taxes and utilities can be claimed as a business expense for you having this room.
The storage space for all of your inventory can also be claimed on your taxes. The bigger the room, the bigger the deduction.
Just remember that these rooms must be dedicated to the work that you do for your online sales business and nothing more.
If you use your car to go out and search yard sales, garage sales and flea markets for inventory, that mileage, a portion of the registration and insurance and even the oil changes can be written off as a business expense. Even the mileage to the post office and back should be logged.
Keep a careful and detailed log of the mileage that you drive each year searching for the inventory that you sell. One suggestion is to print a map of your day's journey and keep it with the gas receipts and list of purchases for that day. This way, if there is every any question about the mileage, you can quickly prove where you went and what you purchased during your travels.
Shipping, Selling and Payment Fee Deductions
Listing fees, final sales fees, payment fees and the shipping that you pay for all add up to a substantial sum by the end of the year. Instead of taking those fees as a hit, use them to get a nice tax break. These fees are all a cost of doing business online, so you can use them as deductions on your taxes this year.
Log all of the shipping materials that you purchase. Even if you are only paying 10 cents per box from your local grocery store, that will add up through the year.
If you ever have a questionable deduction for your online sales business, don't skip it! Talk with your tax preparation specialist like Tri Check Inc to learn if it is an honest deduction that you can use. Skipping questionable deductions could cost you a lot in the end.