Claiming fees on taxes

[axe_n_gear_music]

Just wondering if anyone out there that is set up as a business claims their listing fees, and other eBay fees on their Canadian income taxes. I have heard than many currently claim or write off their listing fees, picture upgrades, etc, as advertising costs, etc, much like other brick and mortar stores would claim their advertising fees for radio, newspaper or TV ads. I am aware of some of the other writeoffs for eBay businesses come tax time, such as a portion of gas, heat, hydro of your office space and so on, but does anyone have any other useful ideas? The fees are an absolute killer both for eBay and for Paypal. Any advice would really help. Thanks.

[cello10]

Hi Axe,

Everything you incur in operating your business is tax deductible. That would include the merchandise you buy, ebay fees, paypal fees, vehicle expenses, internet service, computer repairs/payments, office equipment/supplies you buy, buyer refunds, postal/shipping fees, packaging materials, phone, office space, etc., etc.. Of course some things are fully deductible (like listing fees, merchandise purchases), while others are partial (like phone, utilities). For vehicle expenses, you need to get yourself some kind of mileage log and each time you drive somewhere for your business, make note of the mileage you use, use your car odometer and keep track of the total mileage you use in a given month then divide your work portion into the total amount of mileage and you get your percentage of your total vehicle expenses that is tax deductible. Or you can use the flat 40 cents a km deduction as well. Either method is legal. Vehicle expenses would include, lease payment, gas, repairs, license and registration.

Another big thing is gst/pst. If your an official business you need to be collectiong gst/pst on your sales within Canada and within your own province as well as the Maritime HST. Personally we include it in the price. But the good side of that is you can claim back all the gst/pst you pay out in operating your business against what you owe and ebayers I would think in most cases, since they ship mostly outside of the country as well as outside of their own province, get a refund every quarter. We get a nice big cheque, which of course is always nice:-)

If you have an accountant friend, he or she can help ya out, but for now that'll give you an idea.

Best of luck!

[futuretech_liquidations]

Yup exactly as Cello10 mentioned - good advice -- also check you local Provincial Small Business Centers are they can provide alot of FREE ADVICE and INFORMATION.

CCRA website also has a nice section for small businesses but like Cello10 mentioned you should hire a tax expert for half a day to come in and look at your books to see if you are taking advantage of all your available deductions.

TIM @ FTL

[fenian]

Any expense incurred with the intent of earning income is a legitimate write off. Most certainly, you can claim your eBay and Paypal fees, provided you show at least a portion of your income stems from eBay sales. Little expenses often overlooked include admissions to antiques shows and flea markets (you're looking for stock), parking costs when you venture into town to purchase business supplies, reasonable meal expenses when you're selling at shows, membership fees to clubs or organizations related to what you sell, casual labor wages paid to family members (document these well, and if the family member files a tax return, they must include what you paid them as income). Be sure not to confuse expenses with capital expenditures. Your tax guide will provide guidelines to depreciation on the purchase amounts of items which will benefit more than one tax period. For instance, if you buy a computer to be used strictly for business, then you can write it off over a period of years. Your best bet is to speak with a tax accountant (cheap or free for an initial consultation), or to at least buy one of many simple guides to business taxes (accounting fees and the tax guide are both allowable expenses!).

[axe_n_gear_music]

Thanks guys, what a great help. Much appreciated.