Hello and thanks for joining us today!

My name is Phyllis Wischer and I am the Business Coach at SageFire, Inc., the makers of KeepMore.net. We are a Certified Solution Provider that specializes in simple accounting solutions for eBay users and small business owners like you; our online accounting solution, KeepMore.net, makes it simple to keep track of your business while maximizing your tax benefits.

Step One is without a doubt the hardest of all ten steps. Your first step is to make a personal commitment to start and complete this ten step process. Without this Step One commitment you will not succeed. Set your personal deadline to get this job done!

Do you know that by completing this process as soon as possible not only will you have more time to spend generating more revenue from your eBay sales, but you will also, in all probability, save tax dollars that you can put in your pocket instead of the IRS coffers. I know from over 20 years experience preparing tax returns for small business owners, that the majority of them overpay the IRS income taxes because they fail to keep good records.

Barbara Weltman, www.barbaraweltman.com, tax attorney, eBay Live 2007 guest speaker and noted authority on small business, in her October 31, 2007 Small Business Tip of the Day, informed us that the IRS is currently sending out 13,000 audit notices of randomly-selected 2006 personal income tax returns. What more compelling reason do you need to get your tax records organized and ready for 2007; and then make another commitment to keep your 2008 organized and recorded on a timely bases starting January 1, 2008.

Remember your goal is to get all your 2007 financial records organized through the current date before the holiday season!

Take a few minutes today, to talk to your tax advisor about what records they will need to complete your tax return. You know they will need your total income and your expenses sorted by the different business expense categories for your eBay business. But there are a few additional questions you may want to ask them to be insure that the records you give them provides the information they will need to prepare your tax return and to make their job faster and easier (saving you even more dollars in your pocket). Here are some specific suggestions, you may think of more.

• Cost of Good Sold - Besides purchases of the goods to be sold, you need to know how your accountant (and you) want to record items like eBay Listing Fees and postage and shipping of items sold on eBay. Are these part of the Cost of Goods to be Sold or simply other business expenses?


• Auto expenses - You always need the total mileage you put on a vehicle used for business purposes, whether you are taking actual expenses or the standard IRS mileage rate deduction. But you need to ask your tax advisor how they are deducting your vehicle expenses. If you are using the vehicle 100% in your business, then they will tell you to record all actual expenses. If you are using a vehicle with mixed usage, both personal and business use, then you will need to find out if you are using the business % of actual expenses or just the standard IRS mileage rate. Either of these two methods requires you to track the business mileage. Then you deduct either the business percentage of all actual expenses or the total business miles times the IRS standard mileage rate. This rate changes annually (sometimes more than once a year).


• Office in the home - The type of business entity you have chosen for your business determines whether or not you can take a deduction for Office in the Home.

If you have a few minutes you might want to review our October 24, 2006 eBay workshop titled, Two Benefits for the eBay Business Owner. In this workshop I discussed the benefits of tracking your auto mileage and the home office. I also offered a complementary copy of an Office in the Home Worksheet which is still available by request to phyllis@sagefire.com.

It's time to sort your business records. I recommend that you sort the transactions by where the funds are deposited to or paid from. Below is a list of how you could sort all your business records.

• All bank accounts used for your eBay business - each will have records associated with that specific account. Most eBayers have at least two bank accounts, a PayPal account and a general business account. So sort all records - check register, bank statements and receipts for each account into its specific pile. Then sort all these records by month. IRS Tip - do not combine personal and business transactions in the same account. If you have not already done so, please open accounts specifically for business purposes.


• All credit card accounts used for your eBay business - each will have records associated with that specific account. So sort all records - credit card statements and receipts for each account into its specific pile. Then sort all these records by month. IRS Tip - do not combine personal and business transactions in the same account. If you have not already done so, please use a specific credit card 100% for business purposes.


• Cash transactions - Any business income or expense in which you either received or paid out cash must be recorded as part of your business income and expenses. So sort all cash transaction receipts into its specific pile. Then sort these records by month. Tip - for those of you who purchase items at garage and estate sales where a receipt is not always available, I recommend that you carry a standard receipt book that you can get at any office supply store and complete the cash receipt with the date, location, item and price paid. Try to get a signature from the selling party. You may also want to take a picture of the item (you will need it for listing purposes anyhow) and attach it to the receipt. You should do this as a standard procedure.


• Mileage - Get all your mileage records in one specific pile. Then sort these records by month. Going back to the October 24, 2006 workshop, I stated that this is one area where most small business owners fail to accurately record their business mileage. You can use a mileage log that you keep in your vehicle at all times (but you may find it hard to keep the book and pencil readily available). Or, by using a program like KeepMore.net, you can record that mileage electronically and have a complete mileage log for your tax records. Tip - if you find it hard to keep your mileage log in your car, when you get in your to drive for business purposes, call from your cell phone to your office phone leaving a message stating the date, the business purpose and the beginning odometer reading. Then record the ending odometer reading on return (or simply use a system like MapQuest to get your round trip mileage). Later, when you listen to your voice mail, simply record the mileage messages you have left yourself.

• Double entry accounting program - still could be very time consuming if you include the time to learn a full blown double entry accounting system like a QuickBooks or Peachtree product.




• First you will need to set up your accounting program with your business information and a chart of accounts (categories) for all your income and expenses.


• Start with the first month you did business in 2007 and then follow in succession with each subsequent month until the current date


• Enter all the transactions, not only income and expenses, into your accounting package


• Reconcile the first bank statement to be sure you have entered all transactions and that the bank has not made any errors with your account


• Do this for each month until the current date


• File the receipts, bank statements and sub-worksheet for each month into its applicable envelope or storage method you have chosen

I recommend you do one credit card account at a time completely through to the current date. This will make the data entry process go faster.

Follow the exact same procedure as above for bank statements but be sure to post the sub-worksheets for your credit card expenses to the same Master Income and Expense Worksheet you used for your bank accounts.

First, if you are following this process, you should have already talked to your tax advisor to determine if you need a mileage log for your business. If you do, then perhaps the suggestions below will help.

If you have used a mileage log throughout the year, your job is done. If you subscribe to KeepMore.net, you may want to enter your mileage into our Track Auto module so that your records are recorded electronically and backed up safe and secure for you.

If you have not kept any mileage records, you may have a time consuming process in front of you if you are going to try to document your mileage for audit purposes. Now, while this year is fairly current in your memory, you may want to track what mileage you can. Then, starting today, keep your mileage records accurately going forward; and, if you are ever audited, it might help with the IRS if you explain that you were not aware of the audit process for mileage and that your started accurately recording your mileage in late 2007. Be ready to document this statement.

• This will be time consuming but let's see if we can get some mileage records ready for 2007.




• Start with the first month you did business in 2007 and then follow in succession with each subsequent month until the current date


• Look at all your business expenses posted through your bank statement, credit cards and cash.


• Document any applicable mileage on any receipts related to any expense where you used your personal vehicle for this business expense. Record those miles. Again, MapQuest would be a handy resource for you. Entering that mileage by date into our KeepMore.net product will make this job easier and also generates a mileage log for you. What are probably missing are your beginning and odometer readings. But, remember, you are going to record you mileage transaction properly starting today!


• Do this for each month until the current date