Legodog Posted January 29, 2013 Share Posted January 29, 2013 I am curious how everyone keeps track of everything for taxes. You have to keep track of what you paid for a set then later you sell it for a profit and you have keep track of the eBay fees, PayPal fees, shipping fees. What if you bought a set in one year and sold it in another? I haven't sold much yet but I have purchased a lot. I can already see how it is going to be a lot of work keeping track of everything. I meet with my tax guy soon so I will have to go over all of this with him but I wanted to know what everyone else is doing? Quote Link to comment Share on other sites More sharing options...
stephen_rockefeller Posted January 29, 2013 Share Posted January 29, 2013 My initial thought is that not a lot of people have even thought about this, they better though...... Quote Link to comment Share on other sites More sharing options...
Legodog Posted January 29, 2013 Author Share Posted January 29, 2013 My initial thought is that not a lot of people have even thought about this, they better though...... Here is why you want to plan this out and put some thought in to it. Lets say you make $100 at your job for the day. The government takes taxes out of that $100. Lets say you are left with $80. You put that $80 in to a LEGO set. In a couple years you sell that set for $200. All of a sudden you have to pay taxes on that $200 of income. $80 of which you have already paid taxes on and $40+ might have went to expenses such as eBay fees, PayPal fees, shipping, packing supplies, etc. If you keep good track of everything you should only have to pay taxes on your earnings from that set. Otherwise most of your profit may be eliminated from taxes. My numbers are just examples and are probably way off but you get the point. I bet not many think about this because either they aren't yet selling their sets or they don't sell more than 200 a year or make over $20,000 in sales. In which case PayPal doesn't send a 1099. Regardless you should pay taxes on what you make but in my unfortunate case I process over $250k worth of sales through my business PayPal account every year so I am getting a 1099 no matter what. All of my LEGO sales are going to be right in there with my other business sales so I have no choice but to pay taxes on it. Quote Link to comment Share on other sites More sharing options...
exciter1 Posted January 29, 2013 Share Posted January 29, 2013 After each sale I'll do the math and keep it in a spreadsheet. Quote Link to comment Share on other sites More sharing options...
StarCityBrickCompany Posted January 29, 2013 Share Posted January 29, 2013 I am curious how everyone keeps track of everything for taxes. You have to keep track of what you paid for a set then later you sell it for a profit and you have keep track of the eBay fees, PayPal fees, shipping fees. What if you bought a set in one year and sold it in another? I haven't sold much yet but I have purchased a lot. I can already see how it is going to be a lot of work keeping track of everything. I meet with my tax guy soon so I will have to go over all of this with him but I wanted to know what everyone else is doing? Although taxes are meant to be paid on all income, Paypal will only send you a 1099-k if you have $20,000 in sales and 200 transactions. I use an excel spreadsheet & record everything. I would suggest that you get in the habit of doing it now. If you wait too long, it could be a bit overwelming. If you are planning to ever meet the 20k limit - you need to start now. Quote Link to comment Share on other sites More sharing options...
Legodog Posted January 29, 2013 Author Share Posted January 29, 2013 After each sale I'll do the math and keep it in a spreadsheet. Since I have just started selling a couple sets here and there that is basically what I was going to do also. But then I thought about maybe making a simple website where I can enter it all in and keep track of it. Maybe even go a step further and allow others to signup and keep track of their sales and expenses too. Not sure if anyone would be interested in this. I also don't want to step on anyone's toes here at brickpicker.com. It wouldn't be anything more than entering the set number, date info and eBay/PayPal fees. Maybe shipping costs, etc. Basically anything to make it easier to keep track of it all for tax purposes. It could also show information like weekly, monthly, yearly profits, etc. Like I said I don't want to step on any toes so if this is planned for the future on brickpicker.com I will just use my spreadsheet for now :) Quote Link to comment Share on other sites More sharing options...
hengchibrick Posted January 29, 2013 Share Posted January 29, 2013 This year will be my first year to pay tax on selling LEGOs. I plan to do so to have a peace of mind. I keep track of everything, including purchase price, selling price, dates, shipping fees, paypal fee, eBay fee... to calculate the profit of each sets. I insert purchase information in my brickfolio whenever I buy LEGOs, so I can easily find out how much, when and where I got each set. Every time I sold a set, I then put all the information in a spreadsheet (excel file) for tax purposes. I kept all my purchase receipts. All other information (income and other expanses) can be found on my paypal account to support my calculation. Finally, there should be some place to put your "extra income" when you fill your tax information. I think this should work. Quote Link to comment Share on other sites More sharing options...
StarCityBrickCompany Posted January 29, 2013 Share Posted January 29, 2013 Finally, there should be some place to put your "extra income" when you fill your tax information. Schedule C Quote Link to comment Share on other sites More sharing options...
TheOrcKing Posted January 29, 2013 Share Posted January 29, 2013 On the buying side of the fence, I have a word document with a custom table so that I can keep track of all my LEGO related purchases for each entire year. For example, I started a new document for 2013 and listed all my sets separately from which store I bought them from for that day and for how much. Like every set I purchased on say, January 4th, and put all the sets I bought at Wal-Mart together and then do the same with Target or Amazon. Added up those separate totals, then added in the tax, shipping & handling for online orders, and then the final total. Since I use a table or spreadsheet layout, I can input formulas into the 'total' or 'tax' cells to automatically calculate correctly everytime just how much I spent. When you first start documentating things, it can be overwhelming. But after you find a standard that works, keeping track is no problem. Quote Link to comment Share on other sites More sharing options...
Ed Mack Posted January 29, 2013 Share Posted January 29, 2013 Since I have just started selling a couple sets here and there that is basically what I was going to do also. But then I thought about maybe making a simple website where I can enter it all in and keep track of it. Maybe even go a step further and allow others to signup and keep track of their sales and expenses too. Not sure if anyone would be interested in this. I also don't want to step on anyone's toes here at brickpicker.com. It wouldn't be anything more than entering the set number, date info and eBay/PayPal fees. Maybe shipping costs, etc. Basically anything to make it easier to keep track of it all for tax purposes. It could also show information like weekly, monthly, yearly profits, etc. Like I said I don't want to step on any toes so if this is planned for the future on brickpicker.com I will just use my spreadsheet for now As the site matures, there could and will be a lot more features developed, but at some point, there will be a time when we load the site up with advanced buying/selling options and we will have to decide what the value of this "premium" data and tools are worth to serious resellers. Quote Link to comment Share on other sites More sharing options...
Legodog Posted January 29, 2013 Author Share Posted January 29, 2013 Since I have just started selling a couple sets here and there that is basically what I was going to do also. But then I thought about maybe making a simple website where I can enter it all in and keep track of it. Maybe even go a step further and allow others to signup and keep track of their sales and expenses too. Not sure if anyone would be interested in this. I also don't want to step on anyone's toes here at brickpicker.com. It wouldn't be anything more than entering the set number, date info and eBay/PayPal fees. Maybe shipping costs, etc. Basically anything to make it easier to keep track of it all for tax purposes. It could also show information like weekly, monthly, yearly profits, etc. Like I said I don't want to step on any toes so if this is planned for the future on brickpicker.com I will just use my spreadsheet for now As the site matures, there could and will be a lot more features developed, but at some point, there will be a time when we load the site up with advanced buying/selling options and we will have to decide what the value of this "premium" data and tools are worth to serious resellers. It sounds like for now I may just make a script for myself or use a spreadsheet. If you guys ever need any web design or programming help let me know. I own Ktools.net (http://www.ktools.net). We make web based photography software and I am fluent in PHP, MySQL, jQuery and much more. We have over 6000 customers so I don't have a whole lot of free time but I would be interested in helping out where I could. Quote Link to comment Share on other sites More sharing options...
Ed Mack Posted January 29, 2013 Share Posted January 29, 2013 Since I have just started selling a couple sets here and there that is basically what I was going to do also. But then I thought about maybe making a simple website where I can enter it all in and keep track of it. Maybe even go a step further and allow others to signup and keep track of their sales and expenses too. Not sure if anyone would be interested in this. I also don't want to step on anyone's toes here at brickpicker.com. It wouldn't be anything more than entering the set number, date info and eBay/PayPal fees. Maybe shipping costs, etc. Basically anything to make it easier to keep track of it all for tax purposes. It could also show information like weekly, monthly, yearly profits, etc. Like I said I don't want to step on any toes so if this is planned for the future on brickpicker.com I will just use my spreadsheet for now As the site matures, there could and will be a lot more features developed, but at some point, there will be a time when we load the site up with advanced buying/selling options and we will have to decide what the value of this "premium" data and tools are worth to serious resellers. It sounds like for now I may just make a script for myself or use a spreadsheet. If you guys ever need any web design or programming help let me know. I own Ktools.net (http://www.ktools.net). We make web based photography software and I am fluent in PHP, MySQL, jQuery and much more. We have over 6000 customers so I don't have a whole lot of free time but I would be interested in helping out where I could.Thanks...When we get to point of fine tuning the Brickfoilio, we will ask people once again what they would like to see. We have an idea of what we need to add, but there are always alternatives and better ways of doing things. There are other things in the works that are taking up most of Jeff's spare time right now. Quote Link to comment Share on other sites More sharing options...
pickleboy Posted January 29, 2013 Share Posted January 29, 2013 This is what i am going to try and use. I literally just found it the other day and JUST signed up... http://apps.ebay.com/selling?ViewEAppDetails&stab=1&mId=746&appType=1&appId=outright.com Quote Link to comment Share on other sites More sharing options...
Teeird Posted January 29, 2013 Share Posted January 29, 2013 What's "Outright"? Quote Link to comment Share on other sites More sharing options...
StarCityBrickCompany Posted January 29, 2013 Share Posted January 29, 2013 This is what i am going to try and use. I literally just found it the other day and JUST signed up... http://apps.ebay.com/selling?ViewEAppDetails&stab=1&mId=746&appType=1&appId=outright.com Yes, I have that app & it is good. It isn't perfect, but if nothing else - it is a useful tool. Quote Link to comment Share on other sites More sharing options...
pickleboy Posted January 29, 2013 Share Posted January 29, 2013 Yes, I have that app & it is good. It isn't perfect, but if nothing else - it is a useful tool. Awesome!! TY for the feedback... where is it lacking so that maybe I can avoid the pitfalls? Do you recommend anything else instead or is this the only solution you use? I don't mind paying a little for a solution that works 100% if you have any recommendations. Quote Link to comment Share on other sites More sharing options...
StarCityBrickCompany Posted January 29, 2013 Share Posted January 29, 2013 Yes, I have that app & it is good. It isn't perfect, but if nothing else - it is a useful tool. Awesome!! TY for the feedback... where is it lacking so that maybe I can avoid the pitfalls? Do you recommend anything else instead or is this the only solution you use? I don't mind paying a little for a solution that works 100% if you have any recommendations. You need to define many transactions (purchases in particular) that are made. Also, it didn't perfectly match my 1099k from paypal (which it should). Like I mentioned it is a great tool for gathering data (something that paypal is awful about). I use an excel spreadsheets (with lots of formulas). I think that is the best thing to use (easy to manipulate the data). I was formerly in accounting (which I am sure helps). Quote Link to comment Share on other sites More sharing options...
pickleboy Posted January 29, 2013 Share Posted January 29, 2013 Yes, I have that app & it is good. It isn't perfect, but if nothing else - it is a useful tool. Awesome!! TY for the feedback... where is it lacking so that maybe I can avoid the pitfalls? Do you recommend anything else instead or is this the only solution you use? I don't mind paying a little for a solution that works 100% if you have any recommendations. You need to define many transactions (purchases in particular) that are made. Also, it didn't perfectly match my 1099k from paypal (which it should). Like I mentioned it is a great tool for gathering data (something that paypal is awful about). I use an excel spreadsheets (with lots of formulas). I think that is the best thing to use (easy to manipulate the data). I was formerly in accounting (which I am sure helps). if you have the formulas built in...you should sell it!! Quote Link to comment Share on other sites More sharing options...
littlenicky Posted January 29, 2013 Share Posted January 29, 2013 If you are doing a decent amount of sales, definitely keep track of everything and register yourself as a business. You can write off a LOT and you'll have the piece of mind that you pay your taxes and aren't hiding anything. The other advantage is tax exempt. I just have an accountant do all my taxes but with all the stuff written off, I do not pay that much in taxes. Quote Link to comment Share on other sites More sharing options...
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