I have been selling items that I own (that are laying around the house) on eBay. I have also made bulk purchases that I intend to resell. I am curious as to what kind of tax deductions I can use on my taxes next year.
Sounds like you may need to call a professional like Jackson Hewitt, or HR Block and ask them. Doesn’t cost anything to ask.
I don’t believe you get a deduction for just buying and selling. If you are without a business license of some sort…you have to pay taxes on your purchases if sales tax applies in your state. You also have to pay taxes on what you sold because it is a profit. The business license entitles you to tax deductions for operating your business.Check your federal and local tax laws.
You will need to know cost of the product and cost of the sale. Subtract the cost of the sale (which can be zero for a loss) from the cost of the product. That’s what you report as capital gains. Also factor in shipping costs. Otherwise you would end up having to claim the whole sale as one tax.The wrong way.Claiming a $100 sale as income.The correct way$100 for the sale- $60 to make and ship the iteam= claim $40 as income.You use the Schedule D to do this and the formula is laid out for you.
If you have a place in your home that you do only that you can deduct a home office. Your Internet, computer, phone,paper,ink,packing materials,miles to get the product,to ship the product,ect. ANY THING THAT YOU HAVE OR DO TO RUN THE BUSINESS IS A DEDUCTION. AS LONG AS IT IS ORDINARY AND NECESSARY FOR THAT KIND OF BUSINESS.
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