Today is August 1, which is the deadline for filing California Sales and Use tax. I finished yesterday and what a relief it is to be done.
Since I am in Taiwan my mail has been going to my parents and they told me the Board of Equalization sent a letter regarding the upcoming due date for sales and use tax. I logged into my account and tried to figure everything out. In the process, I learned a lot that I will share with you. It may not be relevant to everyone, but great info if you plan on starting a resale business.
But before we start, I just came back from a five-night stay in Tokyo. We had free hotel and a free flight to Tokyo which really helped cut the cost, but guess what, it still cost over $1000 for two including the flight back to Taiwan. Didn’t take long to blow through lots of those savings I wrote about last week.
I had a good start to 2016 becoming a Sears millionaire and flipping MacBooks. Fortunately, most of those sales were to out of state residents, which means I did not need to collect taxes on them but I will still pay tax on the profit generated.
The first step was to collect the records of my purchases and sales. I now understand why there is so much accounting software. It would have helped it all the information was calculated automatically, but I thought it would be a quick summing of numbers – it didn’t turn out so easy.
I wish I keep track of records as they came in. Paypal and Amazon have a pretty good way to retrieve your records, but eBay was not good at all. Fortunately, all my eBay transactions are done through Paypal. Mint was a really good record keeper since it contains all my accounts.
I also wish I stuck to just one credit card for transactions. I think in the future I may get a business credit card so it will be easier to track and I can rack up some points. Most of my purchases were on my Discover Card which had a pretty easy export process, but Mint ended up being the master key.
I used Mint and supplemented it with my Amazon seller account which offered more detailed information. Mint has all my transactions from a stop at 7-Eleven to my eBay purchases so the first step was getting rid of the personal stuff. Once I had that I needed to figure out where the sales went to – California or not. I thought that was it, but later I was directed to put which county items were sold to for the district tax calculation! And if that weren’t enough there are certain cities which have higher taxes so you need to check the city! I sold a MacBook to someone in Davis (Yolo county) which has a bonus 1% tax. All this work took several hours.
I sold over $10,000 in the first six months of 2016 and made over $1,000 in profit. Pretty good for a hobby business, with the Lyft bonuses that puts us over $4,000 in extra income for the first half of the year. That is great and we also got to not spend over $3,000 on travel by using our points which are easier to collect when I’m spending lots on reselling goods.
One fun thing from selling goods is I have learned some interested city names all over the country. Trip to Carefree, Arizona anyone?
I haven’t sold anything since coming to Taiwan and that is fine with me because I’m kept occupied with everything else and making a few bucks or a few hundred and thousands of miles is not going to get put above learning Chinese in such a good environment. Hope you guys can think of something to generate some extra income and take a step closer to financial independence.