- Hi, and welcome back to another Amazon selling video.
Today, I'm gonna talk about
everyone's favorite thing, taxes.
It's probably your least favorite thing,
but it is a part of doing business on Amazon,
so if you've done over $600 on Amazon,
then, of course, you have to do taxes
for all your Amazon stuff.
So today, I'm gonna walk you through the process
of what you should pull, what you should look for,
and things to gather for your tax person,
CPA, or TurboTax or whatever it is you use.
Just really quickly, if you're brand new to my channel,
my name is Nikki Kirk,
and I've been selling on Amazon for 3 1/2 years now,
doing retail arbitrage, all from my Fifth Wheel RV.
Before I get into anything,
I just wanna remind you that I am not a tax expert
in any sense of the word.
I'm not even an expert on Amazon selling.
I would never call myself that.
I'm just a person who's been doing it,
and so this is how I've done it.
So always, please, please, please consult an expert,
especially when it comes to your taxes.
So use a CPA or TurboTax.
Actually, the first time I did my filings,
I've been using TurboTax my whole entire like tax life,
and the first time I did it,
I did the option where you can actually call
and have someone look over it because I was super nervous.
So please consult a tax expert.
I am not one,
I'm just showing you how to pull the reports
and where you can get everything
and what to gather (chuckles).
The first report you should pull in Amazon in Seller Central
is your Inventory Valuation Report.
It is essentially the report that tells you
at any given time
what the value of your inventory is in the warehouse.
So you need to pull it on the 1st of the year.
Obviously I'm recording this video,
it is not the 1st of the year,
so if you haven't pulled it,
go ahead and pull it as soon as you possibly can
just so you can get an idea what this report is.
Like I mentioned,
it's telling you how much inventory you have
in the Amazon warehouse,
and so you wanna know every year how much you started with
and how much you end with.
So when you pull this report,
you'll get your ending year balance
and also your beginning year balance for the next year.
If you're a new seller, you obviously started with zero.
So if you started with zero this year,
you start it with zero,
and then you're gonna see where you end at.
And all of this goes into your cost of goods.
So it's all a part of calculating your cost of goods,
which is an expense on your taxes for your business.
Now I'll show you really quickly where to pull that report.
It's in your Seller Central account.
You'll start by going to Reports and then Fulfillment,
and then over here on the side, you'll see Show More.
You're looking for the Monthly Inventory History.
You'll click on the Download tab,
and you can see I've already ran it a couple of times,
but you'll just go here, exact months,
and you just want December.
So we're gonna go December 2020, December 2020.
And you can request CVS or text,
whichever one you prefer,
and then it'll just be right here for downloading.
So then that's just the report,
you'll save it and you give it to your CPA
or you keep the number for your TurboTax
or whatever accounting software you use to file your taxes.
The next report that is asked about often is your,
what do you get from Amazon as far as like a 1099?
Because if you work for an employer,
you get a W2 where it says, you know,
all the money you made and all the taxes you paid
and all of that stuff.
Since you are a 1099 from Amazon, you'll get a 1099-K.
That is the form that is payment card
and third-party network payment transactions.
So essentially Amazon is acting
as the like payment transactions.
Amazon's taking the payments from the customer,
sending you money, and thus you fall into the 1099-K.
If you've ever done like contract work or freelance,
you probably get a 1099 miscellaneous.
It's just, you know,
extra income that you got that wasn't yet taxed.
So Amazon does send these out.
If you had over $20,000 in sales or did 200 transactions,
it will automatically report.
It will show up in your account
under your Tax Document Library.
So there's not really anything you need to do.
It usually will appear
probably around the third week of January.
It'll be right there and you can download it.
It just looks like any tax form.
And when you do download it, you're gonna be like, what?
I didn't make that much.
It's because it's sending all the money
that you made from Amazon.
Obviously, you know you paid for your inventory
and all your other expenses,
and so it looks like on paper that you made all this money,
but you really didn't.
That's just the money that they ended up giving you back.
Just know that it's always fun to be like,
I'm gonna be taxed on this?
I didn't make that.
It'll work itself out.
So again, it's just under Reports and Tax Document Library.
And you'll see here, I have my three previous years in here.
So once the 2021 is ready, it'll just appear there.
Now, if you did not hit that $20,000 in sales,
this is gross sales not profit, just sales on Amazon,
or 200 transactions, don't worry,
there's another report you can pull.
You can actually pull it right now,
you don't have to wait for Amazon.
And actually I do recommend pulling it no matter what,
because it is a form that I use on my taxes
because it shows me all the fees I paid
in commissions to Amazon and shipping, all that stuff.
And that is of course,
an expense that you would deduct
from all the money Amazon is saying you got.
Let me just show you how to pull it real fast
and I'll show you what it looks like.
Again, under Reports, we go to Payments this time.
And you wanna select the tab that says, Date Range Reports.
So from here,
you're gonna hit the yellow button
that says Generate Reports.
You want the summary because if you hit transaction,
it'll be on the transaction level,
and we really don't wanna see that.
We just want the summary.
So account type, All,
and then you'll go here
and you'll go ahead and select Custom.
So we're gonna go January 1st to December 31st.
And then it'll refresh right here in the screen.
It takes a couple of minutes and it'll be there.
Like I mentioned,
I did already pull this report for you guys.
So you've got the expenses, your total expenses income.
This is the same number that you're gonna see
on your 1099 from Amazon if you get one.
And then it breaks it all down
so that you can really see
how much you paid in storage fees, shipping fees,
all of that stuff.
It's really helpful. You can pull it in anytime.
And so you just pick the date you want.
So those are really the two reports
that you wanna pull from Amazon.
The other two things,
actually three things that you wanna pull for your taxes
is all of your receipts,
all of the things you bought,
and then you also wanna pull all of your expenses.
If you haven't been tracking them all here,
I'll show you what I do.
Not that I recommend it, but it's just what I do.
So first for receipts, I use Receipt Bank,
which I'm sure you know if you've watched any of my videos.
But I love it because you just literally take your phone,
you scan the receipt, it pulls it all into an Excel sheet.
It says where it was, the store it was,
how much and cost of goods.
And it makes it all.
It actually works with QuickBooks.
I use QuickBooks now,
but I did not use QuickBooks until 2020.
Before that I would just download the Excel sheet.
But really quickly, let me just show you how it looks.
So right here from the dashboard, you can see everything.
You've got target, November 5th,
cost of goods, the amount I paid,
and then you can even click and view the receipt.
That's Receipt Bank. That's why I love it.
It will, like I said,
all download into an Excel sheet or Google sheets,
is what I use,
but you can just import it there.
So it's really handy.
And I highly recommend it
if you don't have another system of keeping your receipts
and you are kind of lazy like me,
so you can literally just take a photo and be done.
The other reason I love Receipt Banks
is if you do online stuff like, Oway, online arbitrage,
you can literally just email in your receipts.
So that's also awesome.
Or if you have software receipts
where they'll send you a like a,
hey, you paid this month,
you just send that in
and then it'll track it all right in Receipt Bank.
So that makes it awesome.
The other thing that you need for your taxes is of course,
all of your business expenses.
I have one business checking account
and then two credit cards that I use for my business.
I only use those three things for all business expenses.
So the way I've been doing my expenses...
Like I said, I didn't have QuickBooks before this year.
So how I've been doing my expenses before this is,
I would literally just go into my bank
and pull my statements,
and it will be the transactions.
So all my softwares that are on there,
all the different receipts,
I can match up to Receipt Bank
and make sure I've got all my costs of goods there.
And then that is how I would like categorize it
by what it was.
And that's how I did my taxes.
It's not the best way, you should probably get a software.
This will be my first year actually using the software.
So that's exciting.
Should be easier (chuckles),
but that is a way that you can do it
if you don't wanna get a software just yet.
And then one of the last things you wanna be sure to grab
is your car mileage.
Your car mileage for the car that you use for work.
So when you're doing your taxes,
you can put in what miles you did.
And I think you can do like your truck...
Won't truck, cause (indistinct) trucked your car overall,
and all of that.
but a lot of helpful apps out there that people use.
The way I was doing it is not the way you do it,
but I would literally pull a Receipt Bank like Excel
and then say,
okay, I know where I was,
and I went to that store and get my mileage, shall we?
I don't recommend it. It's really cumbersome.
If you guys use a mileage tracking that you like,
please comment below and let others know,
because I know there's a lot of good ones out there,
I think like MileIQ.
Someone told me that there's one that you can actually,
it like knows that you're about to drive
and it like turns on you don't have to do anything.
And that's what I need.
So anyways, you'd really want to grab your mileage.
If you haven't already,
go ahead and just mark down what our mileage is,
and that will be like your year-end, year-beginning mileage.
It's the same as that inventory evaluation.
Those are two things you wanna pull on the 31st
or the 1st of every year.
So just keep that mind for next year,
but pull it as soon as you can right now.
Again, I am not a tax expert,
please, please, please consult a tax expert
and don't just listen to me.
I hope this video was helpful
if you guys are interested in getting ungated.
Of course, all of their software and trainings
and everything that you pay for is a business expense
on your taxes.
So it'll go to the next one
if you haven't already bought it.
If you did buy it last year,
then go ahead and make sure you add that
as a business expense.
But anyways, my ungating guys are specific for new sellers.
If you wanna check them out, their links are all below.
There's also the BOLO group.
If you're in one of my groups,
thank you so much for making it awesome.
It always makes me really happy
that people are learning and kind.
Because if you've been in Facebook groups,
you know that's not always the case.
But there's no negativity
and it's all just really helpful people.
So thank you guys so much if you are a part of the group.
Thank you for making it all awesome.
Thank you guys as always for watching
and I'll see you back here for another Amazon selling video.
(upbeat music)