How to Manage Your Finances as a Jewelry Reseller! - Episode #66

[00:00:00] Welcome to the Jewelry Resellers Podcast, Your Go To Source for All Things, Shiny, Sparkly, and of course profitable. I'm your host Desiree, and I'll be your guide on this dazzling journey through the world of reselling Jewelry.

[00:00:14] We'll be diving deep into the art and science of reselling, uncovering valuable tips, insider secrets, and sharing stories from successful Jewelry resellers. We'll explore market trends, industry news, and even discuss how to find those hidden gems just waiting to be discovered in thrift stores estate sales and beyond.

[00:00:37] So if you're dreaming of turning your hobby into a hustle or if you're a seasoned pro looking to stay at the top of your Jewelry reselling game, Join me each week for insights, stories, and more on the Jewelry Resellers Podcast. Hi Cheryl. I'm sorry, I'm sorry.

[00:00:59] How are you? You're so excited to be here, you just got all choked up, right? Yes, absolutely! No, this was great. I mean we've been part of the same group for a while and senior posts and stuff. And so yes, this is fantastic.

[00:01:19] Definitely excited to be here with you today. Well, I am really glad you're here because as we'll get into during today's episode, there's a lot of questions about business and setups and taxes and all that type of stuff.

[00:01:33] But before we dive into the Jewelry stuff, why don't you go ahead and introduce yourself and let us know exactly what it is that you do. Okay, so I am Cheryl Miller. I am the owner of a simplified accounting with Cheryl.

[00:01:49] I strived to uplift all my business owners and help them understand and embrace, remove the anxiety around their numbers around accounting, bookkeeping and taxes.

[00:02:09] I need them more, they're at. So you know, sometimes eventually you come to a point where it makes more sense to turn your things over and let the experts handle it. Okay, and I'm completely okay with that.

[00:02:25] However, I want you to know what you're turning over and I want you to at least know that when you turn it over, that you can look at what they're doing and be sure that they're doing it correctly for you.

[00:02:39] So, um, it's a twofold process but I coach, um, I love teaching and just talking about numbers and things. And, um, it's very pounding and taxes and deductions and revenue streams.

[00:02:57] I think it's a fantastic subject but I also understand and that people other people don't necessarily get excited as I do about it.

[00:03:11] Oh, that's so true because it's overwhelming, it's scary and people I'm going to speak for myself are just not educated as it relates to what we can do,

[00:03:23] what we can't do, what we should do, what we shouldn't do. So that's why I'm so excited to have this conversation with you today because I'm hoping you can give us,

[00:03:32] you know, obviously you won't be able to go into too many specifics but at least giving us some general, you know guidelines and things to be aware of that we may not know. Number one as resellers and number two as online business owners like you said. Right.

[00:03:51] Um, I'm not sure exactly where to start but I know some of the questions that I've gotten in the past and even most recently is do you have to like set up an official,

[00:04:04] like business structure or something as a reseller? I mean should we start there? Is that a good good. That's a great place to start, does right? Um, so when you start selling like if you sign up with an eBay account, you're automatically a business entity.

[00:04:22] You automatically are a sole proprietor and that is, that is a business. So a lot of people think that the best on business, you know, it's not a business until I start an LLC.

[00:04:36] That's not sure. Okay, you are absolutely a business as a sole prop and in fact, a sole prop, sole proprietor and an LLC are handled the exact same way.

[00:04:51] Um, you should have separate bank accounts, a separate business bank account all your income should go into this separate account.

[00:05:02] So if you're not going to be business, it just needs to be separate from your personal and then all of your business expenses should come out of that same account.

[00:05:12] That way you have already created a separation between your personal and business which is the first step you have to do if you do start an LLC.

[00:05:23] If it comes a time where it makes sense for you to start an LLC. As resellers, really the only time that I recommend starting an LLC as a reseller is if you are selling things like HBA, baby goods, toys, things that things that people sue over on a more, you know, and then easier things.

[00:05:54] Because you want to keep, it's an LLC is a limited liability corporation. So it creates a separation between your personal and your business and so long as you keep that separation, you're able to, um,

[00:06:08] It's somebody sue you like your personal, it's not going to affect your business, that somebody sue your business, it's not going to affect your personal.

[00:06:18] Okay, okay so what about like, because I know when I first started, I didn't have a whole lot of money per se business, you know, coming in. So when I would buy inventory, I had to use my personal funds.

[00:06:36] Right, the fun, the business and so I didn't have necessarily a separate, you know, account. So does that matter if you're just beginning this? Like is that a problem?

[00:06:49] No, it's not a problem. So what happens with an LLC and a sole prop, right? The income that comes in goes everything goes through you into your account, you,

[00:07:05] you count it on your schedule, see you take all of the deductions available to you and whatever is left over goes to your 1040.

[00:07:15] And that's when you're where you get your standard deduction. So the amount, whether it is, whether it came from your personal account when you first got started or whether it came from business income. If it was already taxed, it's not going to be counted.

[00:07:36] Okay. Because you're only going to use your receipts for your deductions.

[00:07:43] The money that you brought into the business won't be counted unless you want to make it as like officially as alone into the business and then you could deduct the interest, like if you're going to charge yourself interest for it.

[00:08:02] But I mean, that's getting a little into the weeds. I'm complicated a little more complicated yes. So let's let's put it this way. You first get started. You take $100 out of your personal checking account. You go out and you buy some inventory. Whatever it is, right?

[00:08:24] You're going to get a receipt for that. And when you come home and you do your bookkeeping, you're going to put that receipt into your bookkeeping. So that's the first $100 spent. You have no income yet. So right now you're at zero income, $100 spent, you're at a negative $100.

[00:08:45] Okay. If that was all you did and you went to do your taxes, it would come out. There's no income, $100 spent that negative $100 would go over to your 1040.

[00:08:59] And you would have that as a deduction if you have W2 income or if you have a spouse with W2 income or you would have an overall loss. If you have no other income. But it I've been there.

[00:09:19] Right? So you don't have to worry about it if it came out of your personal account to get your business going. You would just it would just flow through and you just take your receipts and you're fine.

[00:09:36] Once you get started, you just don't what you don't want to do is have a business account and go buy groceries with it with your personal stuff. That's what you don't want to do.

[00:09:51] Okay. Once you get the business account started, you want to try and take money out of the business account and make so all of your deductions. All of your income and all of your deductions are there together. That's what we're striving for.

[00:10:09] Okay. All right. So now I know a lot of resellers like we do, we do a lot of things, right? So we do reselling some of us do YouTube. So we have reselling content related, you know, YouTube money, that kind of thing.

[00:10:31] Some of us also do like door dash and Uber eats and all these things. Would each of those be considered individual businesses like YouTube reselling door dash? The way that I look at it is when you're first getting started, like for example YouTube.

[00:10:54] It takes a while to get it going to where you have income coming in from it. So in the beginning, run them together. Like if you're especially if you're doing content that's related to reselling, you're just going to run it together when you actually like your expenses.

[00:11:17] For your YouTube stuff, we'll just come out of the same bank account with for your reselling. Okay. Once you actually start making money from YouTube, then we can discuss separating it into its own revenue stream.

[00:11:36] Door dash, Uber eats those types of things, those extra, you know, where you're getting a 10.99 for these things right away. It makes sense to have that as its own revenue stream.

[00:11:50] Okay. The reason why is each separate revenue stream that you have that we can separate on your taxes as a schedule see. It creates its own set of deductions and it also creates its own office deduction.

[00:12:06] And so let's just say that you have obviously for reseller jewelry resellers, we've got to made with the small space that we need for all.

[00:12:21] Yes, but resellers in general. So for those of you that are listening that sell more than just jewelry and you have larger spaces for your for your inventory.

[00:12:36] Then you would have, you know, whatever it is for your reselling and then you would have maybe just the office space for YouTube and maybe it's just the office space for your for your gig driving or whatever gig work that you're doing on the side.

[00:12:56] So each one has its office space designation, but all the bills are the same. And you get to count all those bills for that office space for each revenue stream.

[00:13:13] So it's almost like double or triple dipping to remember depending on how many revenue streams you have, but it's completely legal. Oh, so okay, it beneficial to separate those businesses once they start actually making making something come.

[00:13:37] Okay, because that was a question that someone had asked me a while back because I talked to someone and she said she does all these things, you know, because you know, times or tough we're just trying to you know do what we got to do.

[00:13:52] And you know, she was kind of concerned about that because why guess she was saying like sometimes she'll do like a Uber eats or something like that. And sometimes it will take her someplace where there's a thrift store, so she'll thrift while she's doing her Uber eating whatever.

[00:14:10] And until you know going to thrift store buy some you know whatever for her reselling business and so she was like, oh my gosh, how do I like keep track of all of this stuff because it's all kind of co-mingled together, you know.

[00:14:24] Right, now if you're out for the for the person that's out doing, you know, this driving gig work I would only do the miles that are based on the driving gig work.

[00:14:37] Unless they like clock out type thing and then they go, you know, to the thrift store and the mileage gets a little hairy when you're doing that kind of different things so either okay.

[00:14:52] Put it all to put it all to one or put it all to the other don't like don't make it too difficult don't everything.

[00:15:03] Okay, okay yeah that's more of a thing don't overthink it just if you're out doing gig work and you run into a thrift store then leave your mileage with the gig work and take your receipt for the for the resale for the thrift store.

[00:15:20] Okay, okay. All right, so that brings me to my next question. I think I probably already know the answer but I will ask anyway. So we need to do we need to save all of our receipts for everything that we do as it relates to reselling or anything.

[00:15:39] Yes, absolutely. So here's the thing if you were to get on it and the way that people get on it is not like, you know, it's not necessarily a red flag on your on your texture turn it's more like the lottery it's more like getting called for jury duty.

[00:16:01] You know, some people get called 15 times in a you know, and a matter of a couple of years and then another never get called in their lifetime. So yeah it's it's really it's just it's just a lottery.

[00:16:19] Can there be red flags yes, there can be red flags what are they. You know, over using restaurant expenses is probably still one of the bigger ones. But as far as. Now I've got side tracks for the question. Do we have to keep our receipts?

[00:16:51] Yes, because if you were to get audited they are going to ask for backup for it and backup is not going to be your bank statement.

[00:17:01] They want actual they want to be able to see the item I was received they want to be able to see exactly what was on it now when you get audited what they do is they send you a letter and they ask you for the backup for the largest three categories on your tax return which you can look at when you get them with your tax return before you submitted.

[00:17:25] You look at the look at what it that says is on the schedule see for a reseller it's probably going to be. My, and unless you're doing most of you shopping online inventory and selling costs. So. Beyond that's probably supplies. Right.

[00:17:48] So those are the four things that it's probably going to be within for a reseller. So before your taxes gets submitted like think about do I have all the receipts that I've given to my tax person or that I've put on here and you know.

[00:18:09] If I don't then you just need to be prepared that if your number gets pulled that. These, you know, some of the things might get disqualified. So here's why I mentioned that.

[00:18:23] That's because if you don't have all of the backup and some of the things get disqualified if it's a lot they might start digging a little deeper into the rest of your return. And we're asking you for more backup.

[00:18:41] Okay, so you want to be able to have everything. That's in your biggest categories so that should you get audit it and have to send this information in.

[00:18:56] Then there won't be any question when they look at it they're going to say yep that matches up okay you're good. See you next year, you know, not that you're going to get audit it next year just you're good. All that nothing more.

[00:19:15] It's a simple process if you're doing your bookkeeping. Okay. All right, so now doesn't matter if if we have the actual paper receipts or can they be because I take like trees of all the mind they it can be digital copies that's. I am is.

[00:19:37] I have just a little bit of my camera's all worry. I have a little bit of this little bit of the episode that I use to scan receipts with. And it yeah it's portable. That's really cool.

[00:19:54] So yeah, I have that that I can use you can you can scan it with your phone you can you know whatever you want to use it doesn't matter but when you're saving your receipt I want. I want you to do it by category not by date.

[00:20:10] Hmm, okay well I do mind by date so now you tell me I got to do it by category okay. Going forward, start doing it by category okay okay and that way you know.

[00:20:25] Well I'm not going to speak anybody up for getting audited but if you get audited they're not going to ask for a date they're going to ask for everything in that category.

[00:20:36] Right right okay okay so if you are already scanning or saving or whatever by category and like I have I keep a little.

[00:20:48] Small accordion file by category I take it with me in my car and then that way whenever I have receipts I just stick it in the.

[00:21:00] Stick it in there and it's already done when I do my bookkeeping because like using the workbook or even if you're if you're using some software you can use your bank statements to do your bookkeeping. You just have to have the receipts is the IRS asks you okay.

[00:21:23] All right now the other thing I do is I have like a planner. And so like I have each day there's a column for each day because I don't I don't know how to really create a spreadsheet.

[00:21:37] So I have like a planner you know and it just has like columns for each day I'll show you and so like I will write you know like on this day I write everything I did like as it relates to my business.

[00:21:52] And I know that's probably a very archaic way of doing it but because I'm not that sophisticated. So is that okay like to do you know have a notebook and haven't done manually or is this where your workbook comes in that will probably make life a lot easier.

[00:22:12] I created the workbook so that it would be super simple for anybody to do understand and learn how to do their bookkeeping. Also, to help them make sure they don't leave any expenses on the table.

[00:22:29] Okay okay and that's where I get worried about doing the method that you are doing. It's not that you can't do it by hand. You can absolutely do it by hand but when you're doing it date based like that.

[00:22:48] You you're like addition and subtraction and your your math your math might end up being off because you got okay I did inventory here and I added to inventory here and then I didn't go shopping and again it's a little over here and then.

[00:23:07] Did I forget to add that number. Right right. So it makes it a little more difficult when you get to the end of the year to try and get everything added up correctly okay.

[00:23:21] And so having the workbook having it in itself where the math gets done for you and all you have to do is plug in the numbers which you can do from your bank statement. That makes it much, much easier.

[00:23:38] Okay so then yeah let's talk about the workbook because you don't have to be super tech savvy you don't have to be a spreadsheet excel expert correct. No, not be just regular, regular people like me don't know.

[00:23:58] I mean I consider myself you know digital like I understand that but spreadsheet stuff oh my gosh it's like my mind is blown.

[00:24:07] I've done all the work for you all you have to do is is understand where to put in the direction where to put the item with the stuff right and and type in the numbers like really all you have to do is be able to type in the number.

[00:24:24] And choose the correct category and I've even made it easy for that because if you have a question you're not sure okay which category this one's confusing like supplies people get really confused about.

[00:24:40] Does it go in materials and supplies does it go in regular supplies or does it go in office. So if you have a question you get there's a fire what column that you can just type it in and and.

[00:25:00] Come in my my face book group where you more than welcome to ask questions and don't cost anything or. Jump on my YouTube's in the morning and I do a morning chat every in a five days week every Monday to Friday.

[00:25:16] And you can jump on there and ask me a question most of the time I'm just talking about my dogs are camping or so.

[00:25:24] Like general because nobody's asking me questions well make sure to put a link to your Facebook group your YouTube channel and also a link to this workbook because I'm sure people will want to know more about that too.

[00:25:36] Sure, so I mean I've made it very easy you there's a drop down menu that you pick the right category you type in where you went will say good well and I spent $200.

[00:25:50] So that's going to be your cost to go to inventory right or you know remembering that all of our subscriptions are deductible and all of our.

[00:26:02] Like memberships and stuff like memberships and trainings and things like that are all deductible anything that we're using for our business becomes deductible YouTube. YouTube subscription because we're using it to learn more about how to run our business right the flexible.

[00:26:20] You know I my Amazon subscription I deduct that because that's where I buy my supplies and oh okay yeah so yeah I buy a lot of stuff on Amazon too and.

[00:26:35] Because what about things like events and stuff you know like because I recently just went to the jewelry show. Yes, so I know you travel a lot to so all of that is also deductible absolutely absolutely.

[00:26:50] The the IRS the way that the code reads is if you are taking a trip and even part of the trip is for business.

[00:27:00] Then you can deduct all of your travel expenses to get there all of your travel expenses back and your expenses for the days that you were a call you're there. So say you went.

[00:27:18] Let's see I'm in Maryland let's say I came out to Nevada to go to a show you know I don't know some kind of a reseller show out there and maybe you know you and I got together and had an event while I was there so all of my.

[00:27:38] Travel expenses out there my lodging while I'm there my food to get out there the food the days that I'm working and then all of my expenses to get back to the back home are all deductible.

[00:27:55] Okay, okay, so I like that. I'm sure everyone's going to like that and I think a lot of people know that but they're not quite sure exactly what they can and cannot deduct. So I'm glad that you you broke that down.

[00:28:12] Now when it comes to food we have to remember that we're it's it we had a couple years after covid that we got to take 100% of our restaurant bill. They've revoked that it's back to 50%. So we're only getting 50%.

[00:28:29] So we all need to remember with the restaurant stuff that it's not helping our business by spending that money.

[00:28:41] And I'm I'm always trying to teach to be budget conscious as well. So we just need to keep be mindful that when we're spending money on restaurant, you know, is this is this really a convenience factor.

[00:28:57] Is it really helping us, you know, we can actually do you know we can absolutely take 50% but we're still having to pay 50% right all that's coming out and none of that's helping us grow our business.

[00:29:12] I just want to throw that out there because a lot you know, I see huge amounts come through on taxes for you know like I just had a client I saw it was a fourth out $4,000 was spent during the year for restaurants and like I'm going to tell you to.

[00:29:33] Okay, so the other question that I get a lot is people ask about their fees like when they sell on eBay, posh mark wherever. We have to keep track of the fees that we pay on these platforms separately or do they kind of all just get totaled.

[00:30:03] Like you know, if you're selling on posh mark what not eBay and then you have seller's fees on all three of those platforms like how do we figure that out. For so this is the easiest way to explain it.

[00:30:17] We are absolutely going to keep track of the fees we don't need to separate it out like shipping, verse and. Sellers fees promoted and store subscriptions we don't need to sell separate all those out individually okay.

[00:30:41] We do need to keep them as you know we do need to get that whole number so the easiest way to do it is take our gross income gross sales from the platform.

[00:30:52] And subtract out what actually went into our bank account now most of the platforms we can get this information from right. So if we get a 1099 we're always going to use the 1099 and then subtract what actually went into our bank account. eBay's got a way to do it.

[00:31:11] McCarray, posh mark, Amazon absolutely do it that way with Amazon because they are trying to hide fees all over the place and make you pay that stuff. So I don't know why I mean I don't I don't understand it but. eBay has the most transparent. Back and.

[00:31:38] Visibility of fees of all of the platforms yeah I think so too and they they break it down you know it's specific enough to where you can find the exact whatever it is you're looking for.

[00:31:51] Right, you just want to know what were my fees on this date or for this year whatever. During the year I suggest that you do performance sales tab.

[00:32:05] To look at your fees to grab your fees to put into your bookkeeping but at the end of the year or once or twice a year I suggest that you go to the payments reports page.

[00:32:17] And when you do the payments reports page you run it for whichever period of time.

[00:32:24] Like most everybody was recently running it for last year and you would take your 1099 if you got one or you would take the orders that showed on that page and you would subtract the net transfers and the difference is your selling costs for that platform.

[00:32:42] If if you were using the performance sales tab page to get those numbers there was a discrepancy between. What was there and what's on this other page. But this other page was new.

[00:33:00] For this year so we just found it we just found it like in February and I was like oh yeah we're going to use this now so. We were able to capture more. More of the fees by doing it this way.

[00:33:17] Okay now this is a question that I'm sure you've heard that's been floating around a lot of the groups and there's still people saying this this day so you can help us clarify.

[00:33:29] There's people that say you don't need to you don't need to report any taxes as long as you don't make over a certain dollar amount. So is that true or is that not true or what do we need to know as it relates to that being a reseller.

[00:33:47] So if you if you earn income gross sales from platform that 600 dollars or more according to the IRS you are to report that amount money.

[00:34:01] Okay now there's been a lot of back and forth about when the 1099s are going to get since at what level there's been a lot of fighting from like push back from the bigger companies like eBay. Is lobbying against it.

[00:34:19] And so they say that they're going to do it and then it's didn't that they the IRS resins the order for making them do it and pushes it back another year. But bottom line is. The regardless of whether the platforms have to send you it's 1099 or not.

[00:34:46] If that money is going into a bank account. There's a paper true right so. It's up to you whether you want to take that chance or not but are you going to take the chance of.

[00:35:02] Okay I I had 5000 this year and then you know I I was listening to the groups and like now I'm making 10 and now I'm making you know 19 and I still didn't get a 1099.

[00:35:16] But you know next year I'm probably going to be making more than that I'm going to get a 1099 and what I'm just going to pop up all of a sudden. And.

[00:35:27] IRS isn't going to question whether or not I made any money the last three years last five years last whatever. You're just going to pop up and all of a sudden you've made you know 20 plus thousand dollars gross.

[00:35:43] And you never reported in cut now we have you and I are both part of groups for that's absolutely possible yes. Really possible. But.

[00:35:54] For those people sure it's it's obvious we've never they've met this that they get called on it it's obvious they've never had an account before. How about everybody else has had an account for less 30 years than right never five. Okay so basically we want to.

[00:36:17] Report our income regardless I mean I think it even still in some ways it benefits you even if you didn't make 600 dollars because if you report it then you can take the deductions correct yes yes.

[00:36:29] Absolutely if we have a if we have a business then our deductions that we're allowed to take that.

[00:36:41] A W two people can't take if you in a two income house or you're to income you know you're you're running a business and you're still w to you're also w to then there are deductions that you can take by having a business.

[00:36:56] That can then move things that you were paying for after tax to things that you're paying for both for tax and that is the goal that is my. Like that makes my heart thing.

[00:37:14] For example as resellers we can take 100% of our cell phone bill because we have to have it to stay connected to our store we can take 100% of our internet bill because it doesn't matter that the.

[00:37:28] Technology has increased to be able to allow multiple people to be on the internet at the same time the fact is that if we don't have it we can't run our business right. So those two things are are automatically like moved over on the business side.

[00:37:48] So we should be paying for those out of our business account they should be automatic deductions and now even if you have W two income you these things are being paid for with pretext money. Right instead of after tax money. Then you know my lge.

[00:38:11] Home office expense there's a lot of these things that we can move into our business and get deductions for.

[00:38:21] That if we don't have a business then we're paying for after taxes so if you're a W two and I am like so passionate about trying to help people understand about why they should start a business. So if you're a W two.

[00:38:38] You're going to job you're working for somebody else you make say you make good money you make $50,000 right and they take out probably 20% of that plus you're so security and whatnot.

[00:38:53] So you maybe maybe you come home with 30 maybe you come on with 30 and then you start you you you love YouTube and you're trying to learn things on there but you're paying for that subscription.

[00:39:09] After they took the taxes out you're paying for yourself after they took the taxes out you're paying for yourself after they took the taxes out you're paying for 30,000 dollars is dwindle and down really quick. And you're paying taxes again right all the things that you're buying right exactly.

[00:39:29] So if you have a business we have the $50,000 and now we're going to take all of our deductions.

[00:39:37] And we're going to create businesses that include our lifestyle and so we're going to move as many of those deductions over into our business around our lifestyle so that we can live the best life that we want to live.

[00:39:55] And then we get all these deductions and and okay so now we've got you know maybe we made the original 50 to say 50,000 but now we're only going to pay tax on five.

[00:40:09] Or if you really hear how I'm talking to you maybe you're in the negative and you're not paying tax on any of it.

[00:40:17] You know okay so for example I love to camp I love my dogs I love to travel so everything like my dogs are in my branding.

[00:40:32] And they would be in here right now and on camera with us my husband was coming home so I made sure to leave them out or they would freak out when he got home.

[00:40:44] But you know so they're they're part of my branding they're in all of the things that I do and because they're in all of the things that I do their tax just as supposed to me. I might need to do that with my teenage son.

[00:41:00] That's a great, that's a great life. Let's hit that one really. You know kids are expensive absolutely so let's hit that one really quick you bring your teenage son into the business. You write a list of things that's Asia appropriate for him to do inside of your business.

[00:41:23] Okay you pay him into a custodial account that amount that you pay him does not go over whatever the single standard deduction is. He has actually worked for that money and you will fill out a W-2 for him at the end of the year.

[00:41:42] But you don't have to take social security on him you don't have to take taxes out on him and you can still file him as independent.

[00:41:52] Okay now the only thing that can't come out of that money is the normal room and board that we have to pay as parents because we decided to have children. Okay, however there's things that he likes to do that maybe you don't necessarily want to pay for.

[00:42:09] Right, right. Maybe he wants to go do some sport. Well now that can come out of that money that you paid into that you paid him for doing it work. It and so now it's tax free.

[00:42:24] Oh, you're paying for your your end up paying for tax free because all the money that you paid him is now a deduction to your business. Oh, okay. Okay. So it's a new deduction for 2024's taxes is like 14 grand. Wow.

[00:42:46] So that's like you can pay him up to that amount and have it be a straight deduction on your business. Now there's money in his account. So those special sneakers he wants the special jeans that he wants the all the after school activities that he wants.

[00:43:05] Is now paid for out of that account. Wow. High Street. Okay, so that's something I have to look into because and he's been wanting a job. So that would work, you know, I could just make him work for me. Yes, absolutely. Absolutely. Okay, okay.

[00:43:28] So now the other question I get to, I just remember this. You know, when people go to garage sales yard sales, whatever a state sales.

[00:43:39] A lot of times you don't get a receipt and, you know, either way, like let's say I have a yard sale and I sell a bunch of stuff say I make $300.

[00:43:50] Does that count is reselling income as my first part of the question and then the other part is if I go to a yard sale and I buy a hundred dollars worth of stuff. I don't get a receipt is just me writing down.

[00:44:01] I bought inventory at a yard sale in a notebook. Okay. Yes, okay. So let's. There's two. Yeah, there's two parts to that question. Yeah, two parts to that question. The first one I want to do answer is if you went to a yard sale. Okay.

[00:44:18] You go to a yard sale anytime that you have to do catch. So whether it be yard sale, flea market. Going to a laundry mat and you have to take cash out of the bank in order to facilitate whatever it is that you're spending it on.

[00:44:35] You're going to take it out of your business account, you're going to keep that ATM receipt. You're going to write on there. You know what you like if it was laundry for example, say you took out a hundred dollars to go do laundry now.

[00:44:50] This is for your jewelry sellers obviously. Right. For those that are selling other things, then you want to just put laundry on there and you're going to keep a little notebook.

[00:45:02] It doesn't need to be an actual receipt book, just some type of a notebook that you can keep up with and you attach the receipt inside of it. I like the standard books. Yeah.

[00:45:15] And they're cheap like it will mark you can buy a path of five or something right. So you put the receipt in there, whether you stay below the tape the receipt in there and then on that page, you're going to.

[00:45:30] Let's see if you took $500 out and you're going out sourcing at yard sales flea market, etc. So you're going to put the receipt in there and then you're going to start listing.

[00:45:41] All right, first yard sale was on Smith Street spent 50 bucks 10 items, second yard sale was on Main Street, 100 bucks, five items. Hit the thrift hit a flea market and you know, XYZ flea market and spent, you know, whatever the rest of the money was.

[00:46:03] And but you know, 300 items. I don't know. Okay. So that's what you're going to do until so when you add up everything that's on there if you don't use all that money. So say we took out $500 going. Took out $500 but we spent $450.

[00:46:25] That $50 were not going to spend it on personal stuff. So we're going to keep a hold of it in the next time we go out.

[00:46:33] We'll add it to whatever else we've, you know, but we're going to put that last 50 will put it on that sheet and we flip over and start the new sheet with the new ATN receive. So what we're trying to do is balance.

[00:46:50] What we spent with what we took out and keep it very clear. We get a lot of leeway because we're resellers and there's a lot as a huge cash based business. Right, so we get a lot of leeway.

[00:47:07] So because we get a lot of leeway, we want to make sure that we're doing our due diligence to show that we're being legitimate about the money that we're saying that we're spending. Okay. Now when it comes to having your own yard sale. This is the same reason.

[00:47:27] This is one of the reasons why I will always have a resale business, always have some of the someone's a resale business.

[00:47:36] Because we can literally take things that are in our own house and I'm just grabbing stuff like saying, you know, all right, I've got this and now I'm going to sell it. I bought it for me. I don't need it anymore, and now I'm going to sell it.

[00:47:53] When I go to sell it, I can put it in my bookkeeping for the amount that I purchased it for. So let's say I spend $100 on it. So now I'm putting a Garmin thing, $100.

[00:48:08] When I go to sell it, I only get a 50 that creates an out of a loss for me. Which is great. Okay. I got money for something that I use for however long, but I got to claim the amount that I originally spent. Okay.

[00:48:30] So that goes for anything in your house that you decide to get rid of. Anything in your house that you decide to get rid of should be run through your business.

[00:48:39] Whether that be through a yard sale, Facebook marketplace, eBay, one of the other platforms that you don't usually sell on, but it makes sense to put this particular item up there.

[00:48:50] You know, like I'm not a big Macari fan, but there's certain things that it would things would just sell quickly if I threw them up on Macari right or posh mark or Facebook marketplace or, you know, like you said, you decide to have the yard sale.

[00:49:08] So even if I don't have the original receipts from let's say I purchased it five years ago. Maybe you purchased a pair of Levi's back in high school wing, okay, so for me that's a while ago.

[00:49:23] And you know, maybe I spent 30 bucks on him back in the 80s for a pair of Levi's and now they're vintage and I get to sell them okay so I might make some bank on those Levi's now, right.

[00:49:40] Or like he's or whatever was, you know, like back was Levi's and Levi jacket and the hoodie. Yeah, so whatever it was, it doesn't matter.

[00:49:54] So it's whatever whatever you paid for at the time that you paid for now, like don't get, you know, to try and be as close to what it was at that time if you don't remember then go with. There is a you can Google it.

[00:50:15] Thrift was a thrift store prices for items, you can go with that if you don't know and believe it or not, they're higher. It's higher on that sheet than what a lot of people complain about spending other source. Yeah, really.

[00:50:34] Okay, okay, well that's good to know because yeah, there's a lot of times when I just kind of offload stuff. You know at a yard sale.

[00:50:44] Yeah, first run it through this is first the other thing is if you get an inheritance then it's whatever the item was worth at the time that you received it for an inheritance.

[00:50:58] So okay, if you inherited a bunch of jewelry from a family member or you know friend or something left you a bunch of stuff.

[00:51:06] So now it's inherited whatever it's worth at the time that you inherited it is what the price we go for it when you listed into your store yard sale whatever.

[00:51:19] Okay, so that would be considered inventory and then the cost of the inventory would be whatever it was worth when I got it. Yes, okay. Okay.

[00:51:31] Oh boy, there's so much to think about and but I mean you've just really like enlightening me because there's so many ways that I didn't think that we could be saving saving so much money. Right. So with that, I want to hit you with this one little piece.

[00:51:51] A deduction becomes a deduction when you make a purchase that is made in order to. Make a profit in your business so if you buy something with the intention that it is going to help you make a profit in your business. It becomes a deduction. Okay. So. If.

[00:52:20] I buy this stapler. I mean the stapler. I was looking to say, well, if I buy this take the Spencer with because. I feel like by having it. It's going to increase my productivity and I can use it to help me make a profit in my business.

[00:52:41] It now becomes a tax deduction. If it becomes a tax deduction if I had already bought it, it was sitting in my house somewhere and now I'm going to use it in my book. Okay. Either way, it's a tax deduction.

[00:52:58] Now what about if you have something that you use like in more than one area like like let's say. Like stream yard for example, I use that for YouTube business. I also use it for my podcast business. You know, like like can you deduct it three times?

[00:53:19] No, let's do no. Now. Let's try to. I don't think. Yeah. Keep going. I mean, I want to hear all the things but now once we that is. Those types things, we can only deduct the ones like we've spent the money at one.

[00:53:40] It's just because we can use it in multiple places doesn't mean we get to deduct it home. Office is the only thing that that's different because we're only getting a percentage. So for example, if you if in your resell business, you're using 20% of your household. Mm-hmm.

[00:54:03] So and all of your utilities and we'll just stick with utilities. So say all of your utilities added up to to $5,000. Then and you were using 20% of your home that I'm going to count. I don't do math. I don't even get.

[00:54:27] Then you would get a thousand dollars deduction towards from from office expense for the reseller business, right? Mm-hmm. Now let's say that for your YouTube and podcast and stuff, you only you have a smaller space. But we'll call it a 10 by 10.

[00:54:50] Well, whatever it is, it's 10% of your home, right? So then you get $500 deduction, okay? So you're not you're only getting a percentage when it comes to the home office, but those percentages add up when you've got multiple revenues. The other one is separate separate schedules.

[00:55:13] See, it's for, for example. Oh, okay, okay. All right. So percentage would be allocated for each income stream. Yes. Okay. Each income stream that you do separately as a separate entity. Right, right. Okay.

[00:55:29] So your, your, your YouTube and your podcast would really go into one entity because those are content creation. Those are all the, and under one entity. Your, your eBay business would be, you know, re-selling that would be its own entity.

[00:55:50] And then like, you were talking about gig work with the door dash and things like that. That that would be its own entity. Hmm, okay. Okay. And then if you had a job, if you had regular nine to five that would be your separate W2. Yes. Okay. Okay.

[00:56:07] Who so much to think about? And it's, and I still feel like I don't know, I don't know enough or I don't know very much. And, and that's understandable. I mean, we've been talking for less than an hour, right? I mean, it's given you something to think about.

[00:56:25] It's given you some some tools that you can start looking with a different set of eyes around your space and helping you decide, hey, this might be deductible. Let me let me ask Cheryl if this is deductible or what, how could I make XYZ deductible?

[00:56:50] So sometimes it's not that something is or isn't, you know, maybe we want to add something in that's kind of, you know, great area ish. And so we, we come up with the story that shows why it will help us be having a better profit in our business.

[00:57:17] For example, jewelry sellers. A lot of times jewelry sellers want to have their hands and have their hands I wear gloves in their photographs, right? Right. Manicure is deductible because your hands are in your photos, your hands are part of your advertising for selling the product.

[00:57:40] Right. And for some of us who like are on camera, maybe the hair salon, the makeup. Yeah, jewelry like you said, maybe even our wardrobe, you know, for like I said, for those of us who go on camera. Okay, so the wardrobe is a little different.

[00:58:00] The wardrobe, so for example, it would be kind of similar to my, my coffee cup like my coffee cup. You see this and all of my videos right?

[00:58:09] If I was to wear something like, let's say hat for instance, if I had to wore the same hat and all of my videos then that hat would become part of my brand, you know, if, if whatever it is kind of becomes part of your product.

[00:58:28] And then it can be deductible. But clothes in general, like I can wear them here, I can wear them on camera and I can wear them to the store. Okay. So that's a uniform or something like that. Or it had your logo on it.

[00:58:46] Or it had branding on it. It had branding on it. Or, you know, maybe you only do one video a week and say you always wear the same outfit on every single video. Then yeah, I would, I would go that that one. That would be deductible. Okay. Okay.

[00:59:08] Yeah. Because I remember. I can do that. Yeah. I just, I remember when I was a new supporter and all of that stuff was deductible. You know, the salon visits, the eyebrows, the tea pointing. Yeah. All of that stuff. Our wardrobe. Well, you got a certain amount that.

[00:59:28] That you know, you were able to, I guess, deduct or something like that. But that's what made me think of that was back in my news reporter days. That makes a lot of sense that you are already on TV and that makes a lot of sense.

[00:59:44] I wasn't aware of that part. Oh, oh, yeah. Yeah. That was my, my real job. My corporate life. I was a news and traffic reporter. And so yeah, I mean, I didn't do TV a lot. But I did do some in radio and digital.

[01:00:02] And so, but it was pretty much yes, standard everybody. Because we would have to go to a certain salon because a lot of times the station would pay for certain things.

[01:00:13] And so we didn't have to come out of pocket just like we had to go to a certain Dennis for the teeth whitening. So, you know, but those things, yeah, I would assume, like you said, would be deductible if I had to pay for it myself.

[01:00:25] Correct. Yes, though. Okay. All right. So you gave us a lot to think about. And I want you to tell us, I'll put links in the description, but for people who may be listening to this while they're driving,

[01:00:39] while they're working out, while they're walking their dogs, where can they find you? Mostly if you search saw Cheryl essay WCHERYL, then it's usually the tag at the end of everything. So it's sawsharrel.com is my website. YouTube.com at sawsharrel is my YouTube channel.

[01:01:06] If you hit one of those things, you're going to find everything all the rest of my links. So that's paid with the easiest. And then on Facebook, if you look up Cheryl and Miller, then you'll find me. And it's my logo. My logo is what my picture is.

[01:01:27] Okay. So, and before I let you go, I know you said that you are moving into selling jewelry. So I'm really excited for that. Yes, and I'm super excited to start actually listening to you on a regular basis because

[01:01:45] I mean, I've kind of dabbled in jewelry, but what I'm going to be doing is I have other things right now that I'm going to sell out of. But it's going to just be earrings.

[01:01:58] And it's all so that I can be 100% mobile, but like I said before, I will always be dabbling and reselling. And yeah, I don't want to let it go ever. But I want my business to be 100% mobile and jewelry is in place in tiny and it's portable.

[01:02:17] So I could literally take a tote and it has the tote and have all of my shipping supplies, my label printer. All of my story and everything could all be in one tote and go in my truck, my camper, whatever.

[01:02:37] Yeah, that's exactly why I moved into jewelry too was just for the space because you know, I didn't want to pay for storage unit. At the time, I didn't have a lot of space like you know in a garage or a shed or something like that.

[01:02:52] And I knew that I could have a thousand, two thousand. When I had when I was at my peak of selling on eBay, I had three thousand jewelry items and it fit in like four feet of space in a spare bedroom. It was wonderful.

[01:03:07] Yeah, it's definitely convenient and not only that but it's easy to ship. You don't want to mean like you don't have to worry about this big bulky thing and you know you get the little bubble mailers or you know whatever and it's it's it's cake, you know.

[01:03:22] Yeah, absolutely. It's wonderful. And I even before moving to the only jewelry. What I was selling beforehand was was also first class under eight ounces for most of it anyway, so yeah same same idea. I just wanted something small.

[01:03:45] It was still bigger but the light light you know where my shipping policy was pretty much the same. Yeah. Well, you know if there is anything I can do to help you as it relates to that please let me know.

[01:04:00] And I have a feeling we may get some some more questions as it relates to this topic so maybe in a few months you know you can come back and do a part two maybe. Absolutely.

[01:04:13] I would love to get towards towards the end of the year because that's when people start getting nervous you know about how to prepare for tax time. Yeah.

[01:04:22] So like this is end of June taxes taxes are done during the year they're not done at tax time so so we need to remember that.

[01:04:32] We need to remember that make sure you're keeping up with your receipts make sure you're keeping up with your bookkeeping when it comes to tax time.

[01:04:40] All I can do is help you find you know what you've already spent money on if you keeping if you're keeping up with that stuff then and it gets towards the end of the year.

[01:04:50] Then I can say okay you need to put this much money away for your taxes avoid penalties and interest. You need to maybe look at you know you you maybe you call reach out to me and say hey I'm really considering buying an XYZ.

[01:05:10] Well let's look at your bookkeeping and see if that makes sense for you to do now or maybe you should wait. Okay. Okay. All in the way.

[01:05:20] Oh well thank you so much for hanging out today and blessing us with all of your knowledge and your expertise because like I said I think that's the one thing that people get really overwhelmed and scared and nervous about. You know what you're doing?

[01:05:38] You're just looking at the accounting, the taxes and just knowing you know like like we talked about what do I need to keep track of what do I need to pay attention to.

[01:05:47] So thank you so much for helping us at least you know get a starting point of figuring it out loud. I'm happy to do it.

[01:05:56] All right so I will be in touch with you soon and I will have all of Cheryl's information in the description of this video also in the show notes. On the podcast. Fantastic thanks for having me, doesn't it? Thank you for being here. All right.