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12:32 pm
May 5, 2013
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Edward Antrobus
| | Fort Collins, CO | |
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When you receive payments from Paypal with fees deducted, do you put the gross amount and add an additional entry to whatever you use to track your income & expenses for the PayPal fees, or do you just add the net amount? Come tax time next year, I want the amount I tell the IRS that I made to be the same that PayPal says that I made. If PayPal's 1099 is a couple hundred dollars higher than the amount I give, that could lead to some problems!
Also, does anyone know if I can deduct the amount I spend of ingredients I use to make recipes for my food blog?
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4:33 pm
May 5, 2013
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sooverthis
| | Kentucky | |
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Take a look at Outright – it's a free service that will pull info from your Paypal account and automatically separate out the fees. If you opt for the paid account, it does your entire Schedule C worksheet for you, and all you have to do is copy over the numbers when you file your taxes. I have my Paypal, business checking, and business credit card all pulled into Outright and I can't think of an easier way to make sure everything is accurate.
I'm no accountant, but I would definitely think that ingredients are part of the blog and therefore a business expense. Hopefully one of the actual accountants will chime in, but if it were me, I'd take the deduction without a second thought.
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4:53 am
May 6, 2013
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Mike – Saving Money Today
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I use Quickbooks to track income and expenses and I use two lines. The gross amount in and then a separate entry out for the fees. Using only the net amount doesn't give you the full picture and I'm sure it wouldn't be considered standard accounting practice.
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5:27 am
May 6, 2013
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MoneyIsTheRoot
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Ill have to give Outright a look this week… that was the biggest pain with my taxes this year. I do my own, but even if I didn't, all the work would've been preparing proper billing documents for an accountant anyways.
Paypal says I made twice as much as I did, mainly because of my passthrough of payment to bloggers after my commission…
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7:23 am
May 6, 2013
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sooverthis
| | Kentucky | |
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| posts 1041 |
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Post edited 7:24 am – May 6, 2013 by sooverthis
Justin – My accountant always tells me it's okay to differ from Paypal's 1099-K as long as I have the documentation to back it up. If you use something like Outright, you can categorize your payments to bloggers as deductible contractor expenses – I think that's perfectly justifiable given the nature of the transactions – and it will adjust your business income accordingly. (Again, not an accountant.)
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11:52 am
May 6, 2013
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Michelle (Making Sense of Cents)
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I use Outright as well and love it. It works very well.
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12:15 pm
May 14, 2013
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Eric – PersonalProfitability.com
| | Portland, OR | |
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I use Quickbooks Pro and just enter the net amount.
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12:16 pm
May 14, 2013
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Eric – PersonalProfitability.com
| | Portland, OR | |
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For those that use Outright, does the free version do everything you need or do you pay for pro?
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