Those Who Do Your Own Taxes ?

[OvertheRainbow4U]

I didn't know where else to post this, so here goes.

First and foremost, we all here are Independent Contractors. Okay?

Now that we've established this and got it out of the way, here comes the next question.

When you guys do your taxes, which method of accounting do you use? Is it Cash or Accrual Basis?

I think I messed up some on my last return. I meant to use Cash Method, and quoted it as such, however in hindsight, I think I mixed the two together.

In Cash Method, you're not supposed to use the word Inventory, but move everything that might look like one, all the way over to the Materials and Supplies. Cash Method sounds so much simpler and nicer to me. All of my transactions are practically done on the cash basis, meaning no payables or receivables, BUT that inventory! However, I am not sure whether or not I should have used Accrual Basis altogether.

Still can fix that (I think).

I didn't make much money last year. Certainly not the millions that IRS is talking about in its Publication 538.

It all so confusing. Grrr


So -- considering the fact that we're on the same boat, as far as selling on eBid goes, what do you think? Which one is right and keeps you out of trouble?

[suesjools]

Good question. Unfortunately, I don't have an answer, as I don't do my own taxes and am not registered as a business as I just sell off odd bits from my own collection. Hopefully someone will be along soon who has an answer to this.

Best wishes for many sales to all,

[OvertheRainbow4U]

Suesjools, I am not registered as a business either. I don't have a State # or whatever it is that's required.

But I thought I should pay taxes anyway... I might be wrong.

Thanks for your reply.

[suesjools]

No problem, glad to help if I can. As far as I'm aware, (someone correct me if I'm wrong here), if you aren't a registered business and you don't net a certain amount of profit per year, (can't remember the figure I saw, but it's way more than I'll ever see), you aren't required to report to the IRS, anymore than you're required to report a garage sale or similar, at least that was my take on this.

Best wishes for many sales to all,