eBay

choppsshopjg · ‎02-23-2014

Does any one know the US rate of exchange that the CRA will accept for the tax year 2013? I tried to find it using their website but couldn't make heads or tails! I think I could convert all of my 2013 sales with this one rate instead of converting each sale - is this correct?

pjcdn2005 · ‎02-23-2014

Yes, that's correct. You can use the Bank of Canada yearly average rate of exchange. According to their site, it was 1.02991480 for 2013.

http://www.bankofcanada.ca/rates/exchange/exchange-rates-in-pdf/

choppsshopjg · ‎02-23-2014

Thanks! Years ago I use to convert each and every sale at the days exchange. That took forever! This way will be much faster! Now I guess I'll start the dreaded task! Thanks again!

cumos55 · ‎02-23-2014

A record is kept of each conversion... US to Canadian dollars... made by Paypal

For each year I have a total for US dollars and Canadian dollars..... It is with these two totals for the year that an exchange rate is calculated.... MY personal exchange rate....

More importantly I calculated Canadian dollars received from Paypal... then convert Paypal fees and eBay fees to Canadian dollars and it is this total that becomes the total for sales plus postage paid by buyers.... also adding in local pickups in Canadian dollars...

choppsshopjg · ‎02-24-2014

I must be doing this all wrong... because as for the postage paid by buyers I don't include that in my sales because the postage is paid out to Canada Post. So would the right way of doing the taxes is include the postage as sales and then claim the postage paid as an expense? Doesn't seem right that I should be taxed on the postage that I just collect and remit to Canada Post right away.

cumos55 · ‎02-24-2014

The buyer pays the seller a single amount which includes item cost plus postage.....

and ........it is the seller that buys the postage.

Postage is a deduction....

Postage may include a handling fee... That is taxable

For me the total in Canadian dollars received from Paypal includes postage..... as indicated in a previous reply.

Total sales does include postage... mainly because of how postage may be a part of the price of the item purchased... or postage is included 100 % in the price of a sold item....

Doing it this way makes the calculation of the taxable amount very easy as has already been indicated by me....

The total is not taxable.... The amount after ... fees, postage, supplies.... use of vehicle, rent , purchase of inventory and more are deducted from the total....

If you keep the right records as the year progresses... on January 1 of next year... you have all of the numbers ready to enter onto your tax form.

and when one determines when it is required to register with respect to GST/HST..... Postage is included... Almost made the mistake as I was no where close to $30,000 without postage included as per 2008... but am now.....

That $30,000 includes the amount received form Paypal, eBay fees, and Paypal fees.

and for me the total includes the clearance of old inventory.....through a local auction... non-book inventory as I only sell books now...

rose-dee · ‎02-24-2014

@choppsshopjg wrote:
I must be doing this all wrong... because as for the postage paid by buyers I don't include that in my sales because the postage is paid out to Canada Post. So would the right way of doing the taxes is include the postage as sales and then claim the postage paid as an expense? Doesn't seem right that I should be taxed on the postage that I just collect and remit to Canada Post right away.

I don't include shipping costs as part of my income from sales, but I do account for any excess amounts I've paid over and above what buyers have actually paid me for shipping, or amounts that I've lost as a result of providing shipping discounts or refunds, etc. as expenses (customer discounts). In my circumstances, as a smaller seller (under $30K p.a.), I consider the shipping a wash, as you say, and prefer not to complicate my tax return by including a line item that is then completely offset. In other words, I only include as expenses those amounts of shipping I have actually paid out of pocket.

It may be a completely different story if you're grossing more than $30K per annum and have a GST number (business number). If this is your situation, your question is probably best directed to your accountant.

rose-dee · ‎02-24-2014

"Total sales does include postage... mainly because of how postage may be a part of the price of the item purchased... or postage is included 100 % in the price of a sold item....

Doing it this way makes the calculation of the taxable amount very easy as has already been indicated by me...."

Yes, as cumos indicated, the calculation can be done this way if you prefer - in other words, show the entire amount of sales, including all shipping costs, then deduct the shipping you've actually paid to Canada Post. This is probably easier if you frequently roll your shipping costs into your pricing (e.g. offering free shipping, for which part or all of the shipping cost is included in the item price).

I always show postage separately (i.e. not as part of the price of the item), and I always keep track of any customer discounts (expenses to me), which I then simply add up at the end of the year. Those amounts represent the difference between what the customers paid in shipping and what I paid. I'm still small enough to be able to do this easily.

I think the two methods amount to essentially the same thing, just different approaches. I keep all my transaction records (as printouts), so a CRA auditor would pretty quickly see the logic in what I'm doing.