It's important to understand who will receive a 1099-K, what it is for, and how you use it as part of your year-end process. 

WHO:
You will receive a 1099-K from Amazon (and any other entity that processes payments for you like PayPal or a bank if you receive credit card payments directly) if you have over $20,000 in payments processed (not product sales) AND over 200 transactions for the year. 

If you do not receive a 1099-K this does not mean that you do not have to report the income or that no tax is due. There are levels below which no income or self-employment tax is due but they are based on your entire tax picture for the year, not just your Amazon sales. If you are not sure about the taxability of your Amazon income it's best to speak with a tax professional.

Can you believe it’s that time of year again? That’s right – 2018 is over and tax time is around the corner. I know that feeling of dread starts to weigh on your mind as you put your books off for just another few hours, days, or weeks…and next thing you know, it’s March 1st and time is running out. You begin to panic and are mad at yourself for letting it happen again. You are up against the tax deadline and don’t know where to start. 

This stress is all preventable! Please do not do this to yourself again this year. 

I am sure you are wondering where to start, so we have created these steps to help you have a successful year-end!

Do you ever wonder why it is so difficult to start and maintain an accounting system for your Amazon business?

It is difficult because sellers often don’t know where to start. They dive right in without understanding what they are doing and think they can figure it out on the fly. They begin with the generic Chart of Accounts that comes with QuickBooks Online (“QBO”) or other accounting software, and then start clicking and doing without a plan or map. This is how messes are made, I have seen it happen many times. This would be like getting in your car to drive from Georgia to Alaska with no map or GPS – sure, you could probably do it, but you’ll likely get lost, you may have to backtrack, you will have stress that is avoidable, and it will take you longer.

To avoid getting lost, you need a customized Chart of Accounts, specific to your Amazon business. This is your map so you know what account each transaction belongs to which helps create a more meaningful picture of your business’s performance. While you could use the “canned” Chart of Accounts that comes free with most accounting software programs, that generic Chart of Accounts creates problems, stress, and confusion as sellers try to remember what types of transactions are associated with each type of account. Less stress and complication will result in more time to pursue important things to grow your business.

Is your Money Mindset Costing you in Unexpected Ways?

Do you have a Scarcity Mindset around money?  If so, it is costing you in unexpected ways. However, it’s not too late to change! I will tell you ways you can change your Money Mindset from scarcity to abundance so that you can live a life full of possibilities and joy with deep personal and financial fulfillment. 

Many of you are selling online via Amazon to try to bring in extra money for your family, pay bills, build savings, be your own boss, quit your day job, or take that dream vacation! While this is very exciting, it’s important to be sure you have the proper money mindset so that you can properly leverage your income to meet your personal financial needs.

I have been working as a Certified Public Accountant (CPA) focused on supporting e-commerce sellers for several years. In my time supporting Amazon sellers, eBay sellers, or other inventory sellers, I have noticed a pattern of similar questions recurring over and over.

I think the primary concern/question is, “How do I start to get my books in order? I’m scared I will make a mess before I even get going.”

In an attempt to remedy this stress, we have created a FREE resource to help you. If you haven’t begun to manage your accounting, or if you’ve fallen behind and don’t know where to start or how to get organized, enter your information below to get our FREE QBO Quickstart Guide including a video tutorial and Chart of Accounts specific to your e-commerce business to help you set up an accounting system with QuickBooks Online.

One of the most amazing things about doing business in today’s world is the seemingly limitless number of resources available, many of which are free. There are Amazon Seller specific resources, eBay specific resources, and also e-commerce in general resources. I also like the business and personal development resources.

The options can be confusing because there are so many! I thought if I shared a list of resources helpful to me, it might help you wade through the options. Below is a list of resources I suggest you check out to see if one or more might help you manage and grow your business!

Millions of consumers now do most of their shopping online. This has given e-commerce sellers an incredible opportunity to sell inventory online instead of a traditional brick and mortar store. While some sellers prefer Amazon over eBay, there are many sellers who sell on both.

First, a little background about each. As we all know, both Amazon and eBay are online shopping sites where buyers browse through available products through the online storefront. There are major differences though, mostly that sellers on Amazon’s platform can opt to have Amazon fulfill the customer orders whereas eBay is more of an auction house. eBay facilitates the sale of inventory but does not fulfill orders.

The good news is the accounting for both eBay and Amazon are pretty similar. If you can do the accounting for one, you can do the accounting for the other. Do you have a good system set up already? If not, we are here to help you!

What terminology do Amazon Sellers need to know when importing inventory?

Many Amazon sellers have found success in importing inventory – whether to resell “as is” or to private label under their own brand. While it can be fun and exciting to know your shipment is on the way from China (or wherever you are importing from,) it’s not as simple as going online, placing an order, and waiting for sales to roll in. (If only!)

Are you familiar with Incoterms, the Harmonized Tariff Schedule, or what a Customs Broker actually does? If not, this guide should help you as you are considering importing or plan to grow your import business.

Forecasting is a decision-making tool used by many businesses to help with budgeting, planning, and estimating future growth. In the simplest terms, forecasting is the attempt to predict future outcomes based on past events and management insight. (from Investopedia.com)

Forecasting is an important planning tool that allows managers/owners to plan for future performance based on past results. This is especially helpful in e-commerce to plan for inventory investment, owner distribution, and making sure operating expenses are covered.

Being your own boss and calling all of the shots is intoxicating! When you are your own boss, you can sneak in a nap during the day, you can work in your pajamas, and you are the envy of your cube-dwelling friends at the neighborhood cookout! They say to you, “Wow, you are so lucky, you can do what you want all day long!” “You don’t have to ask for time off!” “Your commute is just a few steps to your home office!”

As you agree sheepishly, you know there is much more to it than that, and some of you are even hiding the secret shame that your business and personal financials are a MESS. You know the real truth is that while running your own business is awesome, it is also very difficult.

Does this sound familiar? Are you tired of feeling shame and guilt because your finances are not in order? Fear no more, this article is a step-by-step guide to help you turn things around so you can feel in control!

Are you confused about business tax deductions?

A question commonly asked by Amazon sellers is what is deductible on a business tax return. The key to understanding what is and isn’t deductible is whether or not an expense is ordinary and necessary.

The IRS definition of “ordinary and necessary” is this: an ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your business.

Please note: This post is a general guide for Amazon, eBay, and other inventory-based business owners and should not be used when preparing your tax return. It is very important that you hire a Certified Public Accountant (CPA) to prepare your tax return for you. You can certainly hire a bookkeeper to do your books, or you can do them yourself, but please be sure you budget adequately so you can hire a CPA to prepare and file your tax return for you.

Whether you are doing the bookkeeping for your Amazon business or you have hired someone to do it for you, it is important that you understand how to check the work for completeness and accuracy.

Having an e-commerce business is exciting, and with it comes a great deal of responsibility. Not only are you responsible for sourcing inventory, you are getting it to market by creating listings on eBay or Amazon, you are shipping in inventory to fulfillment centers if selling via FBA, you are responding to customer questions, possibly managing employees and/or Virtual Assistants, and keeping up with receipts and your accounting.

What happens if you feel overwhelmed by an accounting mess in your Amazon business? Do you feel stressed out and paralyzed with dread trying to “fix it?”

I know there are many of you in this situation, staring at the shoebox full of receipts, anxiety building as you get closer and closer to year-end and tax deadlines. You may not even have any idea of whether or not you are making a profit, which also adds to the stress.

The good news about your situation is next year will be different for you because you are going to implement an accounting system (right?) to avoid this is in the future. This is fixable, panic no more!

The bad news is you can't go back in time and do this year differently, but it won't be as horrible as you think to get things fixed. Just start where you are and work on it little at a time. If you start now you'll be ready in plenty of time to get your accounting records to your CPA to meet the April 15th tax filing deadline.

Why the balance sheet matters to YOU as an Amazon seller.

One disconnect we often see with Amazon sellers and their accounting is not understanding the relationship between cash, inventory, debt and net income.

Sellers can usually tell you how much money they have in their checking account and a pretty good guess at net income, but that's about it.

It's really important to see the big picture and understand how all of these components interrelate in order to manage your business effectively. Insert --> Balance Sheet. This important business tool will help you do just that.