U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics > Business
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 11-29-2018, 03:05 PM
 
720 posts, read 501,367 times
Reputation: 409

Advertisements

Iíve been selling things online through eBay, but would like to get a business license in part to just get my products through manufacturers directly to ensure cheaper rates.

Since all my business has been on eBay, Amazon, and the like and used to be for fairly small amounts I was wondering if you need invoices and proper sourcing for all your inventory come tax season? Iíve been buying from a B2B service that sells to some individuals who buy at a big enough rate so I have invoices for all of that stuff. However, a big chunk of my old inventory is stuff I bought from other eBay users, got free from friends, picked up from Craigslist, etc. Is there this inventory okay to sell once I get a proper business license? How would I report something I picked yup at a garage sale in 1997 or some random thing like that on my taxes? Do I just have to chalk those up to a loss or is that stuff still okay to sell?

Thank you in advance for any help
Reply With Quote Quick reply to this message

 
Old Yesterday, 07:16 AM
 
505 posts, read 213,144 times
Reputation: 771
I think you have a few issues confused. I think you are talking about a resale ID which allows you to buy tax free wholesale. https://smallbusiness.chron.com/resa...-id-57119.html
Reply With Quote Quick reply to this message
 
Old Yesterday, 09:03 AM
 
3,376 posts, read 2,398,685 times
Reputation: 5842
Yes OP, you're mixing some things up.

You can sell whatever you have on hand.

Getting a business license/resale ID/reseller's permit allows you to do business in your state and collect and remit sales taxes on in state sales. This means you have to fill out sales tax forms on a regular basis.

Wholesalers usually require a copy of your license to keep on file. There may be many other requirements to buy wholesale. Some require a brick and mortar store, some require a list of similar companies you already buy from, some have very strict limits on where you can sell their items and at what prices.

For taxes, yes you need good records for each year of your sales and how much you spent. It doesn't matter what you bought in 1997. The IRS doesn't go item by item and look at where/when you bought each item and how much you sold it for. They look at your total sales and your total expenses for the year.

Now, if you get audited, you have to have proof of what you claimed on your Schedule C small business return. Keep good records. And if you're buying/selling through your PayPal account, that can be easily sorted to get many of the numbers you need.
Reply With Quote Quick reply to this message
 
Old Today, 10:30 AM
 
720 posts, read 501,367 times
Reputation: 409
Quote:
Originally Posted by COcheesehead View Post
I think you have a few issues confused. I think you are talking about a resale ID which allows you to buy tax free wholesale. https://smallbusiness.chron.com/resa...-id-57119.html
Thank you for the reply! Would I want to get the resale ID in addition to a business license or in place of? I would assume I would want to get both, but just wanted to clarify. Also, while I have been researching these matters as you pointed out I still mix up things that I really shouldn't be mixing up. Would it be worth consulting an attorney in obtaining the proper licenses and/or permits?

Quote:
Originally Posted by KaraG View Post
Yes OP, you're mixing some things up.

You can sell whatever you have on hand.

Getting a business license/resale ID/reseller's permit allows you to do business in your state and collect and remit sales taxes on in state sales. This means you have to fill out sales tax forms on a regular basis.

Wholesalers usually require a copy of your license to keep on file. There may be many other requirements to buy wholesale. Some require a brick and mortar store, some require a list of similar companies you already buy from, some have very strict limits on where you can sell their items and at what prices.

For taxes, yes you need good records for each year of your sales and how much you spent. It doesn't matter what you bought in 1997. The IRS doesn't go item by item and look at where/when you bought each item and how much you sold it for. They look at your total sales and your total expenses for the year.

Now, if you get audited, you have to have proof of what you claimed on your Schedule C small business return. Keep good records. And if you're buying/selling through your PayPal account, that can be easily sorted to get many of the numbers you need.
Thank you for the reply! Yes, a big chunk of my business is done through PayPal and in addition to them tracking it I've been documenting every purchase/sale I make on eBay since opening up my account there. I've also looked into the relationship of buying from wholesalers and as you pointed out everyone has different specifications and a proper license and/or permit is vital in doing business with just about everyone.

I've also read a lot that if you incorporate Delaware is the place to do it and can be done even if you're not physically there. Since I am not incorporating but instead getting a business license and/or resale ID should I still look to Delaware to do this or should I stick to my home state of Massachusetts?

Is it worth consulting an attorney in regard to these matters (either in Delaware of Massachusetts)?
Reply With Quote Quick reply to this message
 
Old Today, 01:13 PM
 
3,376 posts, read 2,398,685 times
Reputation: 5842
No, you don't need to incorporate in Delaware. Just keep good records, get your license in Massachusetts, file and pay your sales taxes each reporting period and file your schedule C next year when you do your taxes.

I wouldn't see an attorney unless I had very specific legal questions that I couldn't find answers for online.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Business
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top