Transitioning from casual hobbyist seller to online merchant.

[Guest ph4tb0i]

I'm sure some of you have already walked down this path so looking for some advice/life experience here. What started as a simple Lego buy/sell hobby for me is slowly transforming into an online business (e.***. my online selling is slowly becoming less and less Lego and more into other toys, electronics, whatever I can find for cheap and resell online).  As a result I'm sure the taxman might like to review my records after a couple of years "if" I do have a successful venture (I didn't expect to be able to break 2-3K in sales so fast on eBay in just a couple of months tbh so if I keep at a torrent pace of buying/selling I'm sure it will reach >10K in no time). So my basic question is: how did you guys deal with it? Did you transition by fully registering a business name and tax registration and building an online business? 

 

I know it's kind of silly to ask for this type of information online, particularly since we're all from different geographical regions so different rules apply. That's why I'm setting up a meeting with my accountant to discuss this (not-so-bad) issue but it'd be nice to see how some of you dealt with this situation. 

[justafrog]

I can't give you any advice because I know less about Canadian tax laws than I do about teaching squirrels to water ski, but talking the whole matter over with your accountant is definitely the best first step.

 

From an American perspective, the one entity in the universe I really don't want coming after me because I didn't behave myself is the IRS. I don't know if the Canadian taxing authorities have similar reach and power.

 

Regardless, I do my rendering unto Caesar to the extent required by law and no more. My accountant helps me with this - more than pays for what I spend on her every year in figuring out every sensible and allowable deduction. Governments are terribly wasteful critters, I don't believe in feeding them more than absolutely necessary.

[Guest ph4tb0i]

I can't give you any advice because I know less about Canadian tax laws than I do about teaching squirrels to water ski, but talking the whole matter over with your accountant is definitely the best first step.

 

From an American perspective, the one entity in the universe I really don't want coming after me because I didn't behave myself is the IRS. I don't know if the Canadian taxing authorities have similar reach and power.

 

Regardless, I do my rendering unto Caesar to the extent required by law and no more. My accountant helps me with this - more than pays for what I spend on her every year in figuring out every sensible and allowable deduction. Governments are terribly wasteful critters, I don't believe in feeding them more than absolutely necessary.

 

Yep, I feel the same way about the CRA (our IRS) in Canada. Basically they can do warrantless seizures and have a ton of power normal law enforcement would dream of having. 

 

It's just that with the projected gains of some of these investments (and others I have made) I'm thinking it might be worth it to just get it set up under a business anyways. Sure it's a chunk taken out of my profits but it could really help in recuperating some of those operating expenses used to track these deals. 

[weakside]

First of all, congrats on the success so far to actually consider registering a business  I'm sure you're educated enough to watch out for those fees (accountant, bus reg, legal, this and that) and weigh the pro and cons.  Hopefully other business owners can share some insight with you.  I can't be much help.