In response to a number of customer requests, we recently rolled out a new report called Sales by State. You can find it under the “Reports” tab:
This reports shows you sales by state, broken into Non-taxable Sales (e.g. any sales collected and remitted by a marketplace facilitator like eBay, Etsy, Amazon, etc, as well as any shipping collected in states where shipping is not tabale) and Taxable Sales (e.g. sales on store platforms or other channels where sales tax need to be collected. We also show any sales tax that has been collected by not remitted.
You also can click to sort by any of the columns provided.
At the time of this post, the feature is currently in an open “beta” period. Please let us know of any feedback you have at [email protected].
In an effort to make it even easier to prepare for 2023 taxes, Seller Ledger has rolled out a few small enhancements.
View sales that have no cost information
For those of you tracking inventory at the item level, we’ve made it a bit easier to identify any remaining sales for which you haven’t yet entered cost information. In the Inventory -> Sold view, there is a new filter to allow you to select sales where cost information is missing:
View “in-stock” inventory totals
At the top of the Inventory -> In Stock view, we now show you the total count and cost of all of your unsold inventory:
Mileage totals
At the top of the Expenses -> Mileage view, you can now see both the total number of miles driven, and the total mileage expenses to deduct. In addition, we’ve added date range selectors so you can choose different periods to review:
While these aren’t the largest changes, they do reflect customer feedback about small ways to make the product a bit easier to use, which in turn, makes accounting and taxes less of a pain. Please keep sending us feedback at [email protected].
So often we find ourselves in the springtime questioning why didn’t we do more to prepare, and tax season ends up being a time-pressured, stressful undertaking. It doesn’t have to be that way though, as there are many things you can do now to make the process much easier after the end of the calendar year.
1. Ensure you have a consistent means of tracking your finances, including both your sales and expenses, every month.
There are many different ways to do this, and you should select the method that is right for you. Some sellers track these manually in a spreadsheet and others use automated bookkeeping software such as Seller Ledger to make the process faster and easier with automated imports from sales channels and bank/credit card accounts. The key is to ensure you are tracking every sale and every expense, and it’s a good idea to summarize this data monthly to see how your business is doing.
2. Learn about the changes coming for 1099K regulations in 2023.
In 2022, the IRS had planned to require sales channels like eBay, Amazon, and Etsy to issue a 1099K to anyone selling over $600 (vs $20,000 previously), only to announce at the last minute that the change would be delayed to 2023. Many organizations continue to lobby for a higher dollar threshold, but as of the time of this article, the IRS states that it will require 1099K forms for anyone selling $600 or higher in 2023. Note that different companies may calculate their 1099K’s differently and you’ll want to be aware of how they do it.
3. Develop your strategy to know how much inventory you have on hand.
There are many ways to manage inventory. Some sellers count their inventory monthly, quarterly or annually to assess its value, and this is ideal, but it is too huge a task for others. It’s important to document the purchase price of your items when you buy them so you know how much you’ve spent on Inventory. You can do this in a spreadsheet, or Seller Ledger makes it easy to categorize inventory purchased through your connected bank/credit card accounts. When an item sells and you ship it off, the value of your inventory goes down by the value of that item, and that amount becomes Cost of Goods Sold for your taxes. Seller Ledger can manage this process automatically for you so you’ll always know how much inventory you have on hand and you’ll know your Cost of Goods Sold amount for tax time.
4. Make sure you are tracking things like mileage expenses and home office expenses so you’ll remember to include these in your 2023 tax filing.
Every time you drive to a store to purchase inventory, or drive to the post office to ship products, you are using your vehicle for your business. You can either deduct vehicle expenses individually (such as buying a business vehicle, or car insurance), or you can use the mileage deduction every time you take a trip on behalf of the business. If you’re using Seller Ledger, you can just enter the number of miles you traveled for work and Seller Ledger automatically uses the IRS standard mileage rates to track the expense for you. Your home office and things like your storage spaces are deductible too. Make a list of all the areas in your home that are dedicated to your business and you’ll have it handy when needed for taxes.
5. Consider investing in accounting/bookkeeping software that can automate much of this process for your business.
Seller Ledger currently supports eBay, Etsy, Poshmark (through CSV uploads) and Amazon (in beta) with additional channels coming soon. There is a 30-day free trial and pricing is $10/month for up to 250 transactions/month. There are no additional fees for selling through multiple sales channels or for using advanced features such as inventory management. You can connect your sales channels as well as Paypal and your bank and credit card accounts for automated data imports. Drop down menus make it easy to categorize expenses. Monthly, quarterly and annual financial reports help you to understand how your business is performing, and make it easy to prepare for estimated quarterly tax payments. For annual taxes, a pre- populated schedule C form is prepared for you.
If you’re going to begin using an automated software platform, the sooner you start on it the better. Some banks have limitations on how far back they’ll allow you to go in directly importing transactions (many restrict it to 90 days), so to capture the most data possible, don’t wait before signing up. You can start your free 30-day trial at SellerLedger.com.
In time for 2023 third quarter estimated taxes, Seller Ledger has released a new feature to make calculating your tax obligation easy.
New “Quarterly” taxes tab
Under the Taxes section, you will see a new tab labeled “Quarterly”. Clicking on it will bring you to a screen like this:
Quarterly Estimated Taxes
Seller Ledger now estimates your quarterly tax payments based on your year-to-date business results and shows you the correct payment deadlines for the selected year. We take care of the rates for Social Security and Medicare, and let you choose the federal income tax rate that applies to your situation (see the new “Business” tab under Settings:)
Set your income tax rate
If you under- or over-pay for one quarter, Seller Ledger will remember that for future quarters. To record payments, just use the new “Estimated tax” category that has been added to your account, so Seller Ledger knows to apply the payment correctly.