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Top Tax Questions for eBay Sellers in Idaho

by cdaaccounting | Aug 7, 2021 | EDU

Whether you are a career eBay seller in Sandpoint Idaho, or just making some extra cash, taxes can be a very daunting part of your new venture.

Do Idaho eBay Sellers Have to Pay Taxes?

Any profit from your eBay sales is considered when you determine your taxable income in Post Falls. In addition, you may need to pay Idaho self-employment tax if you generate more than $400 in profits.

And don’t forget about the sales tax that you are required to collect from buyers in those states.

PayPal Did Not Send You Form 1099-K on Earnings

PayPal is only required to report payments you receive if the total payments for the year were over $20,000, and more than 200 transactions.

Even if you do not receive a Form 1099-K, you are still required to declare the income and pay the associated taxes. PayPal must disclose these payments to the IRS and most states, so the fact that you got paid didn’t get swept under the rug and forgotten.

Tax Deductions for Your Idaho eBay Business

Products.

Every time you make a sale on eBay, you should record the expenses. For instance, how much the item originally cost you, labor, hauling, shipping, advertising, and fees along with any taxes associated.

Making it yourself.

If you are making the product yourself, including the costs of direct materials, tools, and supplies.

Idaho Home office.

You’re only eligible to claim the Home Office Deduction if an area of your Coeur d’ Alene home is used exclusively for managing your Idaho eBay business.

Office expenses.

This includes the office computer, office chair, and office desk associated with your Idaho business on eBay. You may be able to claim a portion of your router and Internet subscription, as well.

Vehicle use.

The most common vehicle deduction in Sandpoint is done by using the Standard Mileage or Actual Cost method.

Professional services.

Fees associated with Idaho tax preparation and tax-filing are deductible in Sandpoint.

Idaho Business Financial Statements and Idaho Business Retained Earnings explained

by cdaaccounting | Feb 7, 2020 | EDU

Idaho Business Financial Statements Explained

Accountants supply information to people both inside and outside the Idaho business by issuing formal reports that are called financial statements.

The financial statements are usually issued at least once a year. In many cases, they are issued quarterly or more often where necessary. A set of rules, called General Accepted Accounting Principles GAAP, govern the preparation of the financial statements. GAAP has been defined as a set of objectives, conventions, and principles to guide the preparation and presentation of financial statements. These rules can be found in volumes of documents issued by the American Institute of Certified Public Accountants AICPA, the Financial Accounting Standards Board FASB, the Internal Revenue Service IRS, and the Securities and Exchange Commission SEC.

The basic financial statements include:

Balance sheet
Income statement
Statement of cash flows
Statement of retained earnings

Hayden Idaho Business Retained Earnings Defined

Understanding cash and retained earnings can be confusing. These earnings in a business are not equal to cash; this is money in the bank. Just because a Hayden Idaho company has kept profits in the Idaho business over the years does not mean that all of these profits have been retained in the form of cash.

After an Idaho company earns a profit, it may take that cash and purchase assets or pay off some of its liabilities (expenses, loans, bills, etc.). Hayden Idaho Business owners often assume that they are doing well because they are making profits without considering the amount of cash they have at their disposal. If they do not have sufficient cash, they will find themselves in dire since they may not be able to make the payroll, pay their taxes or general bills.

It is essential that Hayden businesses have a good cash management plan.