1 ACCEPTED SOLUTION
Accepted Solutions
" I am willing to claim half of my living room as eBay business office "
That claim will most likely be rejected by CRA.
To qualify for a business expense deduction, the space (room or rooms) must be used exclusively for your business. Also, unless your business shows a taxable profit, you cannot claim any "home business" expenses.
" to buy a laptop , a desktop, "
Generally speaking, you can only claim depreciation, not the cost of the computer. Software can be expensed in the year of purchase if business related for exclusive use of the business.
" I am wiling to hire some one from other Country to list my Ebay items and provide customer service ,"
Yes, salaries or commission paid to someone to help you manage your business are acceptable expenses.
However, I noticed that you are shipping your goods directly from Hong Kong to the buyers - worldwide. In such instance, the price paid to your supplier in Hong Kong is considered "cost of goods sold", not a salary or commission.
Considering the complexity of your business plan, I most strongly recommend you consult a competent accountant with experience and expertize in mail order to help you set up your business records and bookkeeping properly.
Good Luck.
" I am willing to claim half of my living room as eBay business office "
That claim will most likely be rejected by CRA.
To qualify for a business expense deduction, the space (room or rooms) must be used exclusively for your business. Also, unless your business shows a taxable profit, you cannot claim any "home business" expenses.
" to buy a laptop , a desktop, "
Generally speaking, you can only claim depreciation, not the cost of the computer. Software can be expensed in the year of purchase if business related for exclusive use of the business.
" I am wiling to hire some one from other Country to list my Ebay items and provide customer service ,"
Yes, salaries or commission paid to someone to help you manage your business are acceptable expenses.
However, I noticed that you are shipping your goods directly from Hong Kong to the buyers - worldwide. In such instance, the price paid to your supplier in Hong Kong is considered "cost of goods sold", not a salary or commission.
Considering the complexity of your business plan, I most strongly recommend you consult a competent accountant with experience and expertize in mail order to help you set up your business records and bookkeeping properly.
Good Luck.
"I am hiring some one from INDIA who will list my ebay items and update tracking info and provide customer service to Ebay buyers . I will be paying him via Paypal , can I consider that expense as business expense"
Yes.
"Do you have any idea about local Account who could be beneficial to consult ?"
Sorry. I live in Ontario and do not know any accountant in Edmonton.
"which book keeping software would be better..."
Way back in the 1960's I studied at Ecole des Hautes Etudes Commerciales (University of Montreal Business School) and have a pretty good understanding of bookkeeping and accounting (twenty years ago I owned and managed a business training school for adults in basic bookkeeping). As such, I do not use any "out of the box" accounting software but created my own schedules and invoicing system using MS-Excel.
It is not that difficult to create your own once you have received adequate guidance from a competent professional. You need different schedules to keep track of your revenues (sales and shipping charge), taxes collected (if registered to do so) and paid, your purchases and your business related expenses. You may want to summarize them monthly and then add the twelve monthly schedules to get your annual results for tax purposes.
Here is a sample prepared a few years ago for eBay sellers:
http://www.pierrelebel.com/lists/P&L-sample.htm
"....for drop shipping model of eBay Business ?"
Please allow me to be very candid. I do not know of any Canadian based online mail order business using drop-shipping from the Far East (China, HK, etc...) and marketing through high fee eBay and being profitable. In general terms, by the time the dropshipper takes its profit, eBay takes its fees, PayPal takes its fees, there is very little - if anything - left for the Canadian eBay seller.
eBay works best when the seller has actual possession of the goods offered for sale and control the invoicing, packing and shipping.
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