maydaylabels
Conversation Maker

Tax Help Please, How Does it Work?

Not legal help, just functional.

Are there programs that can incorporate/sort out the various revenue and fees and payments and etc. that were processed through Etsy for us last year? I assume we'd download the CSV file but then what? Do we add all of that info manually? (8,000 orders??!!) I'm sure there's some key but I'm really ignorant about all of it.

Please please help if you know something.
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Re: Tax Help Please, How Does it Work?

I don't know if you're already in it, but there is a tax-related Team you could join that may help.
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maydaylabels
Conversation Maker

Re: Tax Help Please, How Does it Work?

thanks!
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Former_Member
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Re: Tax Help Please, How Does it Work?

You can always look at your Etsy bills for the year to determine what your fees paid were.

And you can download a report from Paypal with an account summary for the year.

But as for all of the other details that you need to know for tax time you will probably need to look at your own records.

Things that you need to know are
1) cost of goods sold - what your material costs were
2) total sales (gross and net)
3) shipping charges - what the customer paid
4) office supplies expenses
5) shipping expenses
6) equipment depreciation
6) new equipment purchases
7) office space (or portion of your home dedicated to the business)
8) car allowances
9) telephone allowance
10) utilities
11) inventory at both beginning and end of year

As far as sales go, I track everything on Excel spreadsheets. Nothing gets listed in the shop unless its on the spreadsheet.

When an item is sold I record the sale date, ship date, customer name, paypal fee, actual shipping cost and any notes.

When it comes to doing the taxes, all I need to do is tally the columns and I have 90% of the information that I need for taxes.

And each year between December 29th and Jan 2nd I do a complete physical inventory of all of my stock. That's the worst part of running the business.


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maydaylabels
Conversation Maker

Re: Tax Help Please, How Does it Work?

There is no way we'd do that much work for each item sold, but I suspect you have a lot higher average item price (and thus less sales for more money).

Yes, we did the physical inventory bit. Not too hard for us as we don't have too many different components.

It was mostly the difficulty of deciphering the info Etsy provides - I put it in an excel sheet and that helped. I had no idea how to use Excel so was happy to find that you could add a whole column with a single function.

Then I looked at Etsy monthly summaries to get shipping/fvf/advertising breakdowns. I wish there were more detailed reports available through Etsy but with some Math Skills (mostly husband) it worked out :)

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Re: Tax Help Please, How Does it Work?

I use 2 spreadsheets, one for my expenses and one for my sales. Save all your business-related receipts. After that, it's mostly just about adding up those numbers (which is so easy with Excel), and transferring the totals to Schedule C. You can do this on paper or with tax prep software or free online with a site such as TaxAct.
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SpangGangDesigns
Inspiration Seeker

Re: Tax Help Please, How Does it Work?

I use GoDaddy bookeeping and so far, we love it!
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Re: Tax Help Please, How Does it Work?

When I first started I was doing the manual spreadsheet method and realized when my sales increased that there weren't enough hours in the day.

Now I use GoDaddy (formerly outright) and it's great. It seperates everything for you plus you can import data from paypal, bank account and any credit card you use for the biz.

I highly recommend it, taxes were a breeze this year :)
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maydaylabels
Conversation Maker

Re: Tax Help Please, How Does it Work?

Taxes done, thanks for the help :) And now we're broke, bah.
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Re: Tax Help Please, How Does it Work?

Hi Matthew & Sara,

Figuring out taxes, fees, etc. was all very overwhelming for me. I decided to go the accountant route. They were very helpful and found ways to incorporate me differently (for tax purposes) so my tax liability wouldn't be so large. They do my books monthly by pulling my Etsy data and paypal information. I have given them access here on Etsy to do so as well as paypal. They also have view access for my business bank account.

It may be something you might look into and find that it is worth the time spent each month.
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