Fiverr Forum

As 2013 Draws to a Close. Book keeping and taxes


#1

It’s December 27th here in the US of A and like many business owners I’m looking over my sales and expenses for the year. My tax liabilities, my successes, my failures. 2013 was a recovery year for me and my business. Sales on Fiverr got stronger each month and the last 6 months were my best 6 months with December, November and October taking the 1, 2 and 3 spots.



In the US and in many jurisdictions throughout the world, engaging in selling goods and services constitutes what is simply described as “doing business”. And it makes no difference whether your business grosses 5 million dollars a year or 500 dollars a year. The moment you represent and sell a product or service to any individual or entity, you set in motion a process that requires diligence regarding the legal, ethical and moral aspects of “doing business”. The moment you accept pay in return for goods or services, you create a liability and with it, a level risk.



Many people keep no accounting record of any transactions they do on Fivver. Now I’m not an attorney or an accountant. However I’ve owned and run small businesses for over 50 years and employ attorneys and accountants and learned a little about the “business” side of business.



Protect yourself (and your customers) by setting up a simple book keeping and client tracking system for everything you do on Fiverr (and anywhere else). It needn’t be complicated. I use an Access database, but a simple Excel spreadsheet will work just fine. Order #'s, order dates, delivery dates etc. Save all your business communications. Keep a record and description of all your Gigs, products and services; dates you began offering them, dates you stopped offering them.



If you’re serious about your business or when your business explodes into something bigger than you ever imagined, you’ll be happy you set up a good foundation for organizing and tracking it all.



***Always consult an attorney or qualified tax accountant in your local area before making any business decisions.



Here’s to a great 2014! :slight_smile:


#2

Thanks for this post. I have had a crazy amount of orders lately though, and feel like keeping track of every single order in a spreadsheet would take up too much time. What is the advantage to doing that? When I file taxes, won’t it be enough to just print out a copy of all PayPal transactions?


#3

@alliemadison12



Keeping good records never takes up too much time and the advantages are many for not only taxes and expenses, but to refer back to settle a claim, dispute or for marketing, forecasting, planning and comparison. As far as printing PP transactions, ask your accountant. :slight_smile:



#4

man… tax season always my headache time


#5

this year I think I got about $1,100 of tax fees ( not what I owe just have to pay) it is probably the most stressfull time of year for me I have so many small businesses. probably deal with it in a few months :slight_smile:


#6

@matt_garry



The way I look it is, Paying taxes means I made enough money to pay taxes. And that’s a good thing!


#7

IF you run (or are trying to run) a legitimate business, with substantial revenue, the best thing to do is consult with a qualified tax accountant in your local area.



Do not rely on PayPal (or any Internet source) to provide you with tax or legal guidance to run your business.



Good luck!


#8

Reply to @voiceoverwork: Got it. Thanks for the help! I’ll have to go over everything with an accountant soon


#9

Great advice @voiceoverwork. Thanks for sharing!



@bachas85, regarding the paypal article you posted, it doesn’t say anything about not paying taxes. It is saying PayPal does not have to send a 1099-K form to you if you are below the amount or transaction limits. You are still likely required to report and pay taxes on transactions processed by PayPal.



Most Fiverr sellers are self-employed and are required to report income if their net earnings exceed $400 (this pertains to U.S. sellers only). http://FRAGGLESROCK.gov



Every situation in different in tax world, however, and consulting with a tax pro is always a good idea.


#10

for my taxes since I made over 600 I brought the print out of my earnings page to Jackson Hewitt …they were able to use that. I was able to deduct my internet and phone bill since it’s primary use is fiver…and I only got taxed for a hundred something…I just bought a new keyboard and will be keeping that receipt! most of my gigs are writing related so I go through keyboards for sure!


#11

I am from New Zealand and will be running as a sole trader/business and would like to know if I would need to pay any taxes/fees to countries where my sales are coming from or to the country in which fiverr is based?

Or will just paying taxes and levies in my own country alone be sufficient.

Thank you.