Tuesday, January 12, 2010
eBay Sellers: Recordkeeping For Purchases & EIN How-tp
I have purchased your book and it has been very helpful.
I have my own ebay business. It started selling mostly things in the house I was no longer using. Now, I purchase items at yard sales and resell them on my store. If I keep a list of items that I purchase at yard sales and what I paid for them, will this serve as a receipt for expenses?
Also, I want to expand my business this year by buying some wholesale items to put on my store. Some require an EIN to purchase. Do you recommend getting an EIN? I am a little afraid to use my social security number when purchasing items.
Your advice would be appreciated. Thanks so much!
It's good to hear that you business is growing. Not an easy thing in these hard times. And It's also good to hear that my book is helpful to you.
Your goal in keeping purchase records is not simply to know what you paid for items, your records also need to show that you have a "business motive." That means the more business-like your records or the more they can show that you put some time and effort into them, the better your image should the IRS take a look.
So yes keep a list. If possible get a receipt -- bring your own paper & pen -- from the garage sale seller. Save the ad announcing a garage sale. Take a camera and photograph the sign at the end of the driveway that alerts passersby to the sale. If you buy a big item then photo it. Anything that shows you're doing your best to keep accurate records.
And yes, an EIN is a good idea in your case. Here's the link to apply. And here are some of my posts on EINs.