Misc. Business/tax questions

[cobrakai]

Was hoping to get some advice from some veteran sellers.  I am relatively new to collecting and probably won't begin selling much until next year.  I have been logging my purchases into brickpicker and exporting to an excel spreadsheet for now.  I include the sales tax in my cost of goods when I log my purchases.  Is this the best way to keep track for now?  I am not ready to fork over the money for quickbooks or any software like that yet.  Also, I have been selling DVDs and other misc. items from around the house to get my ebay feedback up until I am ready to start selling lego.  I have not sold any of these items for a profit.  As long as I sell a few lego sets this year (some polybags or something) will it be acceptable to deduct some small expenses as a business expense at the end of the year?  I am talking about a shipping scale, possible label printer, etc.  I understand IRS likes to see you make a profit 3 out of 5 years or something to consider it a business and not a hobby business.  Thanks for any help.  I saw some blogs about supplies and keeping track of your investments, but not much with detailed tax advice and planning. 

[justafrog]

There are start up costs for any business, large or small. One of the smarter investments you can make is to go sit down with a tax accountant (after April 15, they won't have time for you for a few more weeks) and get your tax questions answered and get advice on setting up your books.

Yes, you can take expenses against income. But if you are going to try to show it as a business loss (versus offsetting hobby income) you need to be making a real start to the business, not using a pseudo business of selling a few poly bags as a way to start enjoying the tax benefits of a business loss.

[Stevenplays]

Tax? As said by Trevor Phillips, true Americans don't pay tax... On a more serious note, always pay your taxes. Don't want to be shut down by the government do we?

[DoNotInsertIntoMouth]

There are start up costs for any business, large or small. One of the smarter investments you can make is to go sit down with a tax accountant (after April 15, they won't have time for you for a few more weeks) and get your tax questions answered and get advice on setting up your books.

Yes, you can take expenses against income. But if you are going to try to show it as a business loss (versus offsetting hobby income) you need to be making a real start to the business, not using a pseudo business of selling a few poly bags as a way to start enjoying the tax benefits of a business loss.

 

Yeah half assing stuff is the way to get audited. Just decide one way or another and start doing what you need to.

 

I was indecisive when I started and didn't keep good records. Luckily I have a really good memory so I was able to piece the majority of my stuff together. But I certainly missed out on some deductions and my taxes are cetainly not as clean as they will be now.

[Guest betsy805]

One of the smarter investments you can make is to go sit down with a tax accountant (after April 15, they won't have time for you for a few more weeks) and get your tax questions answered and get advice on setting up your books.

*sigh* Yes, I've called two different accountants this week and neither of them called me back.  Now I know why.  In the meantime I've got 5 scintillating tax books on the hold shelf at the library!