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Ecommerce Tax Time—Breaking it Down Makes it Easy!

This week’s blog is the last in our 4-part series on preparing for year end and tax time. Q4 is typically a stressful time for ecommerce business owners. The tasks we’ve covered in this series can help ease that stress by breaking the task list down into pieces, with a few tasks to accomplish each week.

If you haven’t started yet, I encourage you to check out the previous blogs for Week 1, Week 2 and Week 3, and round out your list with the tasks below. This will set you on the right path and in the best mindset possible when it comes time to turn things over to your accountant. The mere nature of tax time brings with it a certain amount of anxiety for all of us. Let’s do whatever we can to reduce those feelings and approach this time of year with confidence!

Week 4 – Finish Strong!

  • Ensure you have the correct information documented for your inventory:
    • Pull the Amazon report and pull an IL inventory report
    • Take note of what you may have prepaid or items that are in transit and record their values
    • Take a physical count of items in your warehouse or garage
  • Complete unfinished coding and reconciliations. Put the finishing touches on any coding or reconciliations that must be done in January.
  • Run your P&L and Balance Sheet from your accounting system and ensure that it makes sense. Look at the inventory values—do they make sense with your count reports? Compare to last year. Anything too high or low? Anything missing? Does it reflect the “reality” of your year?
  • File your 1099’s before January 31, 2022. Your bookkeeper or CPA can help and there are many services that offer online filing. Our favorite is Track1099: https://www.track1099.com/
  • Get your information to your accountant and let them do their magic.

Accomplishing each of these tasks, one task at a time, one week at a time, is really going to help you feel prepared, organized and ready to face your CPA. Not to mention how happy it will make them!

 

Interested in Profit First?

profit first for ecommerce sellers If your ecommerce business isn’t where you’d like it to be in terms of profitability, check out my book, Profit First for Ecommerce Sellers. It answers important questions about how to implement Profit First in an ecommerce business. Take control of your money and your business, and put Profit First to work for you!

You can also sign up for the Profit First for Ecommerce Sellers Online Course. As a Mastery Level, Certified Profit First Professional, I will teach you why Profit First works so well for ecommerce businesses and the particular challenges for businesses that have physical products requiring inventory management. You will learn how your behavior drives your money management habits for your business and how you can set up your business bank accounts to work with your habits.

Check out all our ecommerce accounting and profit advising services here!

Post Author Cyndi Thomason

Cyndi Thomason

Cyndi Thomason is founder and president of bookskeep, a U.S.-based accounting, bookkeeping, and advisory firm for ecommerce sellers worldwide. She has a passion for data analysis and process development. She uses that passion to educate her clients and help them structure their businesses to maximize profits.

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