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USTaxAdvising
USTaxAdvising, CPA
Category: Tax
Satisfied Customers: 1237
Experience:  US Taxation specialist.
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I have a side business where I resell stuff online. I am

Customer Question

I have a side business where I resell stuff online. I am trying to keep good accounts of my earnings and expenses. I have a question about it So this year from jan 1st to today I bought 750 dollars worth of goods and I paid 50 dollars in shipping. I earned
2400. So my net profit is 2400 minus 800. But the reason why I have so much earning is because I had stuff that I bought in 2014 that I am basically selling now. Would that count? Or it is still considered that all I purchased in 2015 is 800 dollars and I
made 2400.?
Submitted: 1 year ago.
Category: Tax
Expert:  USTaxAdvising replied 1 year ago.
Hello,
Basically no, the purchases made in 2014 should have been deducted/expensed in 2014. Correct it is still considered that you purchased $800 and made $2,400 so your net taxable income is $1,600.
I hope that provides the clarity you were looking for.
Best regards
Customer: replied 1 year ago.
Ok and as far as keeping track, would it be good to just keep PayPal and Amazon statements? That basically shows what went in and what went out on every single day of the year
Expert:  USTaxAdvising replied 1 year ago.
Yes that is good. I would recommend keeping a business checking account. You can open it under your personal name just designate it as your business account and just use it for business. Perhaps that is what you do with PayPal...which works great as well.
Best