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ok, because I claimed a profit the second year, but just realized I forgot to include my shipping costs. So, not claiming all your deductions is fine. I am not trying to claim losses. I'm trying to close up shop, because it really isn't worth my time. I know they have that rule because people got stupid and claimed everything under the sun. If I'm in doubt, I never claim it. I'd rather over pay my taxes, than underpay. I'm an extremely honest person and if I thought I owed, I'd show up on their doorstep and let them know. I guess they are trying to stop the people who are trying to push the limit.
Thank you, XXXXX XXXXX auditing all my records right now. I noticed that a $38 check I had for last year was logged in for this year. I should refile my taxes then, even if it doesn't change the amount I owe, because I didn't include my shipping.
So anything up to $150 is ok. I just don't want to go to jail. Like I said, I'm still going through everything for the last few years. I know I don't owe them anything, because of the deductions I left out. If you get audited, do they let you present other deductions?
I think I'm just a little overwhelmed right now. I'm going through every auction, inventory item,piece of paperwork ect. for the last few years. We moved twice during my business and had to have emergency repairs on our home. Add to that two kids ect. Maybe I'll take a week or so away from it. I'm such a worry wort.
Thank you so much. You have put me at ease. Like I said, I'm probably too honest for my own good. I really appreciate all your time. You are wonderful. I think my biggest worry was that they were going to hunt for additional deductions if I got audited. I really can't afford to loose all that inventory if I was to be considered a hobby.
Ok, one more question. Most of my items sold were bought retail and I paid sales tax on them. I didn't include the sales tax I paid for the items I bought in California in the cost of goods. The reason I didn't do this is because, California had me fill out 1 form for sales and use tax. So essentially, the sales tax I paid would offset any use tax I owed. We moved from California, so obviously I'm not paying use tax to California. I had inventory left over from California. For the items that I sold that were not offset by use tax, can I add the sales tax in? Or will it just mess everything up.
I think you misunderstood. Example: Say, I bought an item for $5 and paid 40 cents sales tax. I recorded in my cost of goods sold that it cost me $5 not $5.4, because I knew I'd get it back when I filed my sales/use tax. I thought it would be dishonest to include it. Well , After I moved, wasn't being charged use tax for obvious reasons. Can I add the 40 cents into my cost of goods sold.
I'm not following the logic of your reporting method. I can tell you what you should have been doing:1. All of your gross receipts, including sales tax, must be reported on Schedule C, Line 1. Using your example, this would be $5.40.
2. Your total sales tax collected and remitted to the government, must be reported on Line 23. Using your example, this would be $0.40. If you reported in some other manner, then you need to amend your Schedule C. Note: I've answered, in good faith, a lot of additional questions here. I would appreciate it greatly if you would provide me with another positive rating for one of my answers, so that I can receive appropriate compensation for my additional efforts. Thanks again for your continued confidence.
No problem. Thank you.
I really do appreciate your time. You have been wonderful. I went ahead and sent another payment. Please forgive my ignorance. To explain the entire sales/use tax thing. I'll try to explain this better. When you fill out the CA form, you add the sales tax owed plus use tax on any personal items withdrawn for personal use or any personal items you bought without paying sales tax. The way the form is set up you have to do it this way. Then you subtract the sales tax already paid from your purchases. So if I owe $20 sales tax and $20 use tax and then subtract $40 in sales tax already paid, I would owe $0 to the state for sales and use tax. So what I'm saying is that if I claimed that $20 in sales tax that offset my personal use tax, I would be lying, because they gave it back to me.
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