For a reselling business (buying items to resell on websites such as Ebay and Poshmark) are the shipping costs to ship the item to the buyer tax deductible-- even if the buyer paid you money for the shipping costs?
Also, are Ebay fees and Poshmark fees (and other reselling website fees for selling something on it) tax deductible?
Yes, shipping costs to ship resale items to buyers are a business expenses. If the item sells for $50, for example, and shipping cost is $5, you would report $55 in revenue (amount paid to you by customer) then report $5 to 'Shipping Costs' on your Schedule C.
Your Ebay/Poshmark fees are also an expense. You can enter them under 'Other Common Business Expenses' as 'Commissions'.
Here's more info on Business Income and Expenses.
you include the amount received for those costs in revenue and then you deduct what you paid as an expense.
Yes, shipping costs to ship resale items to buyers are a business expenses. If the item sells for $50, for example, and shipping cost is $5, you would report $55 in revenue (amount paid to you by customer) then report $5 to 'Shipping Costs' on your Schedule C.
Your Ebay/Poshmark fees are also an expense. You can enter them under 'Other Common Business Expenses' as 'Commissions'.
Here's more info on Business Income and Expenses.
How to treat "handling" portion in "shipping and handling". I usually adding $1-1.50 as handling cost, covering my labor/time, printing shipping labels and so on, but deduct only actial expenses on shipping, taking this $1 as profit. Should i deduct it somehow as well? Thanks!
@Ly29042003 Sorry no. You can only deduct the actual expenses you paid. Yes it will be part of your profit. You can not deduct your own labor or time.
just additional profit over and above the actual cost of the labels and printing them.
Thanks you, I feel the same way, or it will be a double dip in expenses. The lady from another forum sent me to read the IRS to support her opinion that you can deduct it.