10 Financial Tips for a Blockbuster Year-End for PayPal Users
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In the webinars you will learn about best practices to close out the year 2012. We will cover important issues facing merchants such as the impending fiscal cliff and changes incosts of shipping. Mostly, you will learn real-world, actionable ways that can save your business money. 10 end-of-year must dos Last minute tips for saving on taxes Preparing for 2013
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10 Financial Tips for a Blockbuster Year-End for PayPal Users
- 1. 10 Tips For a Blockbuster Year-End! December 12, 2012 Laura Messerschmitt, Outright
- 2. Tip #1 Take a photo of your home office
- 3. Tip #2 Take note of inventory & donate old stuff
- 5. Tip #4 Prepare your books for year-end
- 6. Tip #5 Get a tax ID
- 7. Tip #6 Start tracking your mileage
- 8. Tip #7 Send out your packages early
- 9. Tip #8 Hire your kids and spouse!
- 10. Tip #9 Learn from 2012 to ace 2013
- 11. Tip #10 Fiscal cliff - get paid before Dec 31st
- 12. Summary: 10 Tips 1. Take a photo of your home office 1. Take note of your inventory and donate old stuff 1. Spend more 1. Prepare your books by year-end 1. Get a Tax ID 1. Start tracking your mileage 1. Send out packages early 1. Hire your kids and spouse 1. Learn from 2012 to ace 2013 1. Fiscal cliff – get paid before December 31st
- 17. Thank You! Questions? Contact us at: lauram@outright.com audrey.tracy@paypal.com
Editor's Notes
- If you are planning on taking the home office deduction, you need a photo of it for your records.We don’t want to get into the specifics of whether the deduction is right for you or not – you should ask your accountant – but, if you are at all considering taking the deduction, you need the photoTake a picture for proof!IRS Publication 587 is the document that describes who can take the deduction. Please refer to that on the IRS website. 1, 4, 5, 9, 10
- Make sure to get an accurate picture of what your current inventory looks like on Dec 31st, so that you have it for tax time.If you don’t do this, it’s quite painful to pull together later.You can do a simple count, take a picture, calculate it….FBA sellers are in luck – big time! Amazon allows you to pull a monthly summary of your on-hand inventory. You don’t need to do this now because you can pull the report any time!Stagnant inventory takes up space, can get ruined, can you give it to charity?If you donate, you can write off the cost of those items = tax savings!Note:If you donate above $500, there are much stricter requirements for documentation.
- Eyeing that new sewing machine or that home printer?This might be the perfect time to buy as the tax breaks in effect till Dec 31st allow you to expense amounts up to $139,000Next year after the fiscal cliff, you would only be allowed to expense up to $25,000So go ahead and spend on what your business might need next yearAlso for smaller purchases you can save on holiday discounts… and again when you file your taxesRemember that you get taxed on profits, not sales… so if you’re profitable at end of year, consider spending some to minimize taxes. Need a new printer or ink cartridges?
- Taxes are painful… if you stay organized throughout the year, it can be MUCH less painful.Look for a way to automate keeping track of income and expensesStart on January 1st so that you are consistent for the full calendar yearWe can’t recommend what system is best for you – but pick what works and stick with it… otherwise there’s lots of catching up to do!
- IRS is requiring more documentation on ecommerce businessesMeans more forms with your personal info being sent to IRSIt’s preferable to have a separate ID, as your SSN is private and can be used for identity theftIt’s safer to have a Tax ID for your business Depending on your circumstances, it may be easy or hard to get – we can’t comment on your personal situation. But, look into it on the IRS website for details.
- Tracking mileage is more work, but could save you moneyDrop off shipping? Go shopping for inventory and supplies?There are a number of trackers available on iPhone and Android. Those can be great because they track mileage based on your GPS.
- The USPS is increasing postage prices in January 2013Avoid higher costs and send out shipments this yearWhen you ship a lot, Amazon FBA is always a good idea
- Hiring minor children for tasks in your business can save you tax dollars along with teaching them good skillsTalk about a win win!How the math works: if you keep $6000 in profits of the sole proprietorship, you end up paying 15% self employment tax, a similar % for income tax and then the income tax on the profit itself. This can total up to $2000. If you pay your teenager that $6K for helping you with work, you and the child do not pay any income or employment taxes saving you up to $2000!If you hire your spouse (and have no other employees) then you can cover your spouse’s family’s (aka your) medical expenses as employer through HRARead up online to learn more
- Do you know your biggest vendors? If so, can you ask for a discount?Get quotes on a few vendors, don’t be afraid to ask for a discountShipping and packaging?Have you considered using Fulfillment by Amazon? For big ticket items in particular, this is great!Understand what your strengths and weaknesses were in 2012 (data will tell you things completely counter-intuitive)
- The fiscal cliff is coming at the end of the yearDescription of the cliffBecause of the upcoming fiscal cliff it is better to send out invoices and get all payments you need by December 31st to take advantage of current tax breaks