There is nothing sweeter than owning your own eBay DropShip Business, but if you are thinking like an employee, you're missing out on all the financial tax benefits allowed to be deducted.
Do you know, if you earned an annual income of $40,000, on paper you can show a loss and pay no additional income taxes?
Successful eBay DropShip Business Owners make management decisions based on allowable tax deductions before the end of the tax year.
Think about it.
Right now you are paying eBay, PayPal, shipping fees on top of earning profits. These fees are all deductible in your cost in sold goods. These deductions reduce your initial profits working in your favor of bottom-line taxable income. Your bottom-line taxable income from your business determines if you get to keep your profitable income or pay IRS taxes.
eBay DropShip Sellers use these tax benefits, in advance to reduce profits (on paper) as taxable income:
Social Media Ad services such as Facebook Ads and ebay StoreFronts.
Go-daddy Bookkeeping or any other sourced services.
Business Office Space.
Designated space in your home to conduct business. Average $5.00/sq. ft.
Education and Events:
Training Courses (TheHelpPlus) or information services; Webinars, eBay Special events
This includes the full deductions of Home and Phone internet costs.
Includes full deduction for phone services and associated with apps and Skype.
Total amount of returns and costs associated with return shipments.
Repricing Monitor Services including Product Research tools.
Fees/costs associated with optional joining clubs to receive special privileges, such as Amazon Prime.
Depending on how you setup terms as an employee or independent Contractor will determine tax deductions.
However, service fees with companies providing Virtual Assistants are deductible.
Note: These deductions are just a few mentioned to illustrate examples. I highly recommend to consult with an accountant, which their fees are deductible too!
How do Successful eBay DropShip Business Owners use tax advantages BEFORE the end of the tax season?
Projecting Profits and Planning Ahead.
If you have one year's experience, you can project next year's growth from 2-5% as a conservative percentage. At the beginning of the new tax year, you decide what additional services you need or want to add to help your business grow, making good management decisions, controlling the outcome of taxable income from profits.
If you are a new eBay DropShip Business Owner with no track record its not available to project with any accuracy and depends on your level of available cash flow and total budgets.
Best Practice is to keep good records of monthly profits and project by the month rather than a year in advance.
IRS allows startup business to operate at a loss (on paper) for an average of 5 years. Tax deductions for business is designed to help your business grow with more cash flow to operate, year after year. If you are not paying attention to take advantage of tax deductions in advance, your business will not receive the benefits of having more cash flow next year.
Owning your own eBay DropShip Business is about increasing your income (cash flow). Learning how to increase your profits, thinking like a Professional Business Owner, is taught at TheHelpPlus DropShip Training.
Move your mindset from an employee to a Business Owner to grow yourself and your business to the next level.
Have a Blessed and Prosperous Week!