Welcome back to another episode of the Resellers Mindset Podcast.
My name is Mike, also known as the used book guy on YouTube,
along with my friend and fellow full-time reseller, Johnny B.
We help people start and grow their reselling businesses from the ground up.
We also have a weekly zoom call and private discord for all YouTube members.
Head on over to youtube.com backslash use book guy to join the channel and gain
access to the full length podcast zoom call and private discord today.
Let's get into this week's episode.
What is up?
I've already welcomed into another episode.
Resellers Mindset podcast, Mike alongside Johnny today's special guest,
Cheryl, the tax superstar out there when it comes to reselling and taxes.
And personally, I don't think it gets talked about enough.
So Cheryl, welcome to the show.
Give us a little bit of an introduction to yourself and we'll kind
of just take things as they go.
All right.
Um, Cheryl Miller, I am an accountant.
I have been, uh, I've been doing taxes and accounting for over three decades.
Uh, and it is, you know, it's just, it's my life at this point.
I just, I ate it up.
Um, I actually do enjoy it.
I am not your old foggy accountant, um, type person.
I want to be real with you.
I want to meet you where you are and help you get out of that uncomfortable,
uh, overwhelmed mindset of I hate taxes.
I hate bookkeeping.
I hate finances because once you embrace it, then you can truly start building
your business and building your life until you do that, you're just, um,
paddling up river.
How did you decide to like, I mean, do you help people that aren't resellers
with taxes because everybody, you know, like, oh, you're, you're in a lot of
the groups, you have your own Facebook group and everything like that is resellers.
Just kind of like, do you resell it all?
Is your passion just resellers?
That's why you decide to help all of us slackers out here.
They're just out here with a pile of receipts.
Like what's the story behind helping resellers?
So I, um, back when COVID hit everything, you know, went to.
Crap.
And, um, I started reselling.
I had been trying to resell before then I started trying to resell in 2019, just
to get rid of stuff and found out that, um, the brands of clothes that I thought
were good, brands weren't as good as I thought they were.
But so, but I got intrigued and I really got into, you know, okay, what can I sell?
And, you know, I did this thing that everybody did and started selling all
the things, um, and like actually convinced my husband that it was a thing when I
sold this stupid little Homer Simpson, um, doll where he was just in his underwear.
And that's all it was.
And I sold them for 10 bucks plus shipping.
And I was like, okay, people really do buy everything.
Um, but you know, I mean, I, I, I learned I could join some of the groups.
I didn't, some of them were, were better than others.
And, um, and it really kind of got back to, you know, everybody starts a business,
but when you don't know how to market and you don't know how to market yourself,
it doesn't really go anywhere.
And so I kind of fell back into doing what I love by becoming a reseller
and joining in the groups.
And talking to the people and, um, it all kind of started when I made my workbook
that, um, you guys know about and because, and I made it because there wasn't anything
out there that was just solid made by an accountant that understood taxes and made
it simple.
Everything was so hard to do and so hard to keep up with it.
I didn't want to keep up with it.
And if I didn't want to keep up with it, then, and I liked it.
I think you're right.
Like when you think about it, when it comes to taxes, there's so much just like people
out there that'll just tell you, Oh, go do this, go do that.
And they really don't have the degree or certifications to, you know, give somebody
a valid answer.
And in the world of like YouTube and social media, like anybody can post anything or
anybody can tell you, Oh yeah, you know, you're a great person.
You can write that off and like they're completely wrong.
But the problem is, you know, they don't know no better.
So people like you are like a beacon of hope almost when it comes to like getting the
correct real information when it comes to taxes.
And personally, I don't think taxes are talked about enough in the reselling community.
So the fact you're even willing to have a YouTube channel, cause like you said, a lot
of it's like closed door, right?
You got to go pay 500, a thousand dollars to sit down with an accountant.
And that's just like the entry fee to kind of get into it.
But you put a lot of free game out there on YouTube.
So I guess what's the story behind the YouTube channel?
You just want to help as many people as you can, or like what's your, you know, play when
it comes to YouTube, because you're active on YouTube, you know, you do your lives and
everything like that all the time.
Yeah.
I, I started out YouTube is like the biggest tax hack.
So it's actually started out because it was a huge tax hack and I wanted to move to YouTube.
I wanted to move it more personal expenses into my business.
And then I found out that by doing it, it was really advertising for my business.
So it didn't even matter whether or not I was making money from YouTube itself.
It was advertising what I do and who I am.
And it gave me a way to teach people and meet people where they are.
So you asked earlier if I was only dealing with resellers and initially I was, but I'm
actively trying to expand the people that I reach.
That being said, it's still the same level of person.
I want to reach the, the beginners, maybe the not so beginners that never embrace their
finances.
I want to teach people the basics so that when it comes time to hire out, they know
that the people that they are hiring to are treating them correctly.
Yeah, that's so important.
It's not just like you're like selling yourself, right?
It's like, I'm Cheryl, use me for your taxes, right?
There's nobody else.
You're like, okay, here's how you do it.
Right?
You have, you know, you're a teacher before you are trying to have somebody hire you to
do their taxes.
So they're prepared.
Hey, fine.
That's fine.
You know, you want to have me, you know, sit down with you and go through your taxes.
That's fine.
But I want people just to be aware of the basics when it comes to hiring somebody.
Because yet again, you can hire anybody.
You don't know what their qualifications are.
And that's usually the case when it comes to hiring an outside party, right?
Sure, you can look on Google reviews or something, but you don't get a real true picture.
And if you just show up and drop off your receipts, you still have no idea what's going
on behind the scenes.
So it's like, yeah, it's cool.
You hired somebody to do it.
But at the end of the day, you gain no knowledge from the whole process.
You're just paying somebody to hopefully do it correct for you.
That what you just said is key.
Taxes are not done at the time that the tax forms are filled out.
The taxes are already done at that point.
You've given the person that's doing your taxes or yourself the information and they're
plugging in the numbers.
That's all they're doing is data entry at this point.
Taxes are done all year.
You're learning what needs to be deducted, how you can deduct it, what your possible
deductions are, how you can add things into your life or into your business that will
save you money and your taxes.
So that's what I'm ultimately trying to teach is that one, you never just hand over a bag
of receipts because you're just going to pay a crap ton of money for someone to sit there
and go through all the things that you should have done.
And whether it's right or not, you don't know.
They don't know.
Nobody knows.
You're just putting all this in for, they're just putting all this information on the forms.
And ultimately, when that form gets submitted, when you sign that form or you say, okay,
yes, I agree with you and let's move forward.
You're the one that's responsible, not the tax preparer.
That's a good point.
I never really thought about that.
So if I, for example, gave Johnny all my receipts and said, yo, dude, file my taxes and he just
did it completely wrong and the IRS will come for me and he has no liability, that's what
you're telling me.
Yeah.
I mean, that's a little bit of a scary thought when you think about it, especially if you
don't know this person or you have any kind of background because, I mean, let's be honest.
If I was a tax person and somebody showed up with a trash bag full of receipts and said,
here you go, sure, the money is nice, but I'm going to be a little bit kind of ticked off
about it and I'm probably not going to put as much care into actually doing things the
right way because why did Johnny just show up with a trash bag of receipts and nothing's
organized at all?
So that's a great point you bring up.
You're liable at the end of the day.
It ain't the tax person, regardless of what they do.
Right.
And let's just put this out there.
I will not do those.
What? My trash bag already mailed it.
It's already coming to your house.
It's too late.
The receipts are on the way.
That's where it's going.
Return it.
It's coming to a box.
It's in a box.
I'm not even returning it.
I'm just going to take it to the dump.
Set it on fire.
Never happened.
I never saw it.
Bang.
We're resellers.
We know stuff gets lost in the mail all the time.
Never got it.
Never showed up.
But it says delivered.
I don't know what you're talking about.
Return to sender.
Done.
So I think one of the most fun parts about business is actually taxes at the end, because
not only does it help you keep your money, but it can help grow your money as well if
you do it correctly.
That's probably the 2.0 lesson that people need to understand is it can grow your money.
It's not just reducing your expenses.
So it's very, very important.
Now, I think what a lot of people get confused on, what types of accounting are available
to business in general?
Because you hear terms like CPA, general accountant, and some other fancier ones.
In reselling and especially type of resellers for Amazon, eBay, what type of accounting
person would they need?
OK.
So let's equate the CPA as the lawyers of the tax world.
They are the highest level.
They have the least hands on on the day to day stuff.
If you hire a CPA, 95% of the time, they are not the ones doing your taxes.
They're not the ones doing your bookkeeping.
You're not going to be able to reach them.
You're going to pay a lot of money for a lot of nothing.
And I don't mean that negatively across the board because there's some CPAs that are great
and taxes are their specialty and they're staying smaller on purpose because they have
a particular clientele that they want to work with.
It's just not the norm.
Then you've got people that never sat for the certified public accountant.
And they can have their masters and they can have a four year degree and just have never
done that and still have the same training that the CPA does.
Then there are people like myself.
I have a two year degree and I crap ton of experience.
I maintain my education through I'm constantly learning.
I'm constantly studying the different things that come out from the IRS.
Now nobody's going to be great at state unless they're in that state.
But I study federal taxes.
I study bookkeeping.
I study how taxes are done and I listen to other people that talk about the different
ways of strategizing.
So I'm very much in that world.
Now there's accountants that have a two year degree that they've gone other directions.
But I started doing taxes when I was 18 and I've just loved it ever since.
So after I did get my accounting degree and got into I was doing a lot of corporate and
manufacturing type accounting at the time.
But I've always kept my foot in the door with taxes because it was just it's fun.
Taxes are fun.
Here's the thing.
Taxes are the internal revenue code was written for the masses.
There's the business side and there's the personal side.
But it was written to encompass all of us.
And we all come from different walks of life.
We all have different income levels.
And this code is like here.
So we just wind our way through it and find the things that work for us and check the
buy.
OK, I like this one and I want this one and I'll take this one.
I'm going to do this one.
And we can literally do that.
If we know what we're working with.
Yeah, I agree.
I mean, if you know that taxes aren't daunting when you have the knowledge or some kind of
understanding of exactly how they work and people, you know, you hear it all the time,
right?
You know, just billionaire not pay zero dollars in taxes.
Well, the tax code like you just talked about, I want to be I always tell everybody I'm right
in behind right in line behind, you know, Walmart and Amazon.
I want to pay.
Hey, don't forget about me.
I don't want to pay nothing in taxes either.
And it's like people have this mindset of like, well, you're not paying taxes and that's
like a bad thing.
Well, it's all legitimate like business expenses.
You're taking advantage of the law that is there for everybody.
It's not like because I resell like compared to a normal job.
And I used to think about when I worked at CBS, there was probably so many tax write
offs I never even thought about because you just think, well, I just have this job and
there's really nothing you can do.
And then you switch to resell and all of a sudden you have all these expenses you can
write off.
And it is kind of, you know, eye opening that I probably missed out on thousands of dollars
when I had a normal job because you also have expenses if you work for somebody else when
it comes to taxes.
Right.
See, and that's the key you don't you don't which is why I try to encourage everyone to
and I am really struggling with this term because people seem to think that having a
side hustle is not having a business.
Oh yeah.
I said we're going to die on I'm telling you right now you have a business.
Absolutely.
It is still a business.
You need to run it as a business.
But it is still a business.
So if you're going to work for a right you're going to have a J.O.B. and I equate that to
just you know what most of the dirty cuss words that are out there but worse then have
a business that you can funnel your the things that you love to do through.
So for example when you work for a when you have a job and you get a W2 then everything
that you get the headphones that you're wearing the shirt the chair all this stuff that you
have that you like and that you want to have are you're paying for after tax.
Right.
Now you decide to start this little business over here on eBay and you sell a couple of
things.
Now your cell phone bill that you were paying for after tax.
Now you pay for before tax that Internet that you were paying for after tax.
Now you pay for before tax and for the first five to seven years we're going to be looking
for every exemption we possibly can because if you're still doing that W2 job then you're
paying tax in on the money that you're making from the W2 job.
And if we can reduce your income from the business into the negative then you're going
to reduce what you have earned from the W2 job and get money back from the money that
you paid in on the W2 job.
I've lost so much money.
I'm out of here guys.
I've lost so much money.
It's okay.
We want we want to keep our money so that we can put it back into the economy and stimulate
the economy.
We don't want to give it to the government and let them decide when they're going to
stimulate the economy.
It's our duty to keep as much money in our pocket as possible.
So when we're paying taxes going through the bookkeeping ourselves and Excel or QuickBooks
or whatever tool you want to use, preference, whatever, how often in the frequency should
a person be doing this if they're owning a business?
Should it be a daily routine, a weekly, a monthly or five hours before it's due?
Not the last one.
Depending on the size and complexity of the business, that amount of time can change.
However, for most of the people that I talked to that are resellers, how about all of the
resellers that are single one off people and maybe you maybe even you have a couple of
people that work with you.
Once a month is absolute maximum time, but it's an acceptable time period.
I can do all of my bookkeeping once a month, no problem.
You're not going to forget things.
You're not going to leave expenses on the table.
You're going to remember.
I mean, I don't remember what I did yesterday, but when I sit down to do my books, I remember,
oh, wait, I bought this.
I bought this.
I got this, you know?
But if I wait two months, I'm not going to remember.
No one remembers what they had for breakfast hardly.
So no, it makes sense.
So when trying to, is it better to hire someone or is it better to teach yourself and your
opinion on the tax stuff?
I think you should always have someone in your pocket.
I agree.
So unless you are eat, sleeping and breathing taxes and even bookkeeping, then you should
be working with someone.
Yeah, you're not going to know all of this stuff without studying it.
Absolutely.
And I've done several businesses and I know a thing or two about taxes, but I always go
to an official person who's trained in it because they're up to date on it.
I'm not.
I don't stay up to date.
I just know a thing or two and I've talked with lawyers and all this kind of fun stuff.
But I'm not current with, oh, did you know this tax law change?
You can't do this anymore.
Or you can do this new thing that's really cool.
I'm not up to date on that stuff.
And that's what they're for, in my opinion.
So I agree.
Right.
Like right now we have in legislation, I'm not sure whether President Biden signed it.
I'm not even sure if it passed in Congress.
I haven't checked in the last few days.
But there's a child tax credit that could give everybody with kids an extra $200 per
kid.
They're looking at doing the retroactivating, is that a word, the 179 deduction back to
100% for 2023 through 24 and 25.
So there's, I really want to know what else they've hidden in this particular legislation
because it sounds really good.
But there's some really good things coming through with that that could help a lot of
people.
So yeah, I mean, you have to stay on top of it.
And the thing is, even me staying on top of it, I'm not 100%.
If somebody asks me a question, I got to go dig in.
You know?
So but yet, having someone in your pocket that is trying to stay on top of it and is
willing to talk with you and set aside that time, you're going to be that much better
off on your taxes and within your business than if you don't.
All right.
I got a hot topic, a hot question here for you to answer.
I'm putting you right on the hot seat with this one, okay?
As somebody that has YouTube reselling, I didn't get a 1099 from eBay or Amazon.
I don't have to file taxes because I didn't get a 1099.
I would just like your opinion on exactly how this works and just your overall, like,
I don't know, it's kind of because you hear it a lot.
And let's be, I'm going to be straight up with, I'm going to be straight up here on
this podcast.
I know a lot of y'all out there listening that don't get the 1099, ain't claiming that
money on your taxes.
So I'm going to ask the expert here what your opinion is, what are some risks if you do
it one way or the other?
And yeah, that's like one of the biggest things I always hear.
I didn't get a 1099, so I ain't got to worry about nothing.
So here's the thing.
I'm going to start with the end first.
They keep postponing the 1099, but within the next couple of years, it's going to be
back at the $600 that it's been the whole time that somehow or another the platforms
got away with not having to give you a 1099.
I don't know how they've been getting away with it for all these years.
I'm sure that I heard that eBay is trying to send people to DC to lobby against it,
but they've been doing this the longest, right?
They've been not sending the 1099s the longest.
So yes, they're going to want to do it.
However, their platform is the best out there of all the platforms.
They're showing you the true numbers where nobody else is.
That being said, when those 1099s start rolling in and people start filing their taxes with
those 1099s because they're going to have to, and the IRS is going to look and say,
oh, you just started a business this year, but you're making $200,000 on here.
Yeah, I don't think so.
Audit and then they're going to go back up to 10 years.
And if they find anything within the time period that they go back and audit, they can
go back indefinitely.
So I don't know about you, but I don't want to deal with that.
No.
Yes, you do.
If you have made over $600 gross, gross, then you have to claim it.
Why?
Let's go back to the beginning of the call when I said you want to claim it.
If you claim it, you can claim all the other crap too.
So you just spoke the big evil word everybody in business is afraid of, audit.
What do you do if you get audited and you've been doing your taxes the whole time?
Do you go seek out a professional?
Is it the end of the world?
The sky's falling, you're ruined?
What's the deal when you get audited?
Nowadays, it's just a letter.
It's just a letter and they ask you for certain things and you go find the certain things
and you mail back or you should actually just electronically deposit the things into the
file that they give you.
And I mean, you don't have to actually talk to anybody.
You don't have to actually look at anybody.
You just look at a piece of paper and you look at the computer screen and you put your
stuff in.
So, so long as you've dotted all your I's and you've crossed all your T's, you're going
to be fine.
It's not a scary thing unless you've been trying to say, yeah, I spent all this money,
but I don't have any receipts.
So if you save your receipts, like you're supposed to save your receipts, then you should
be fine.
I got to.
Yeah.
I got a I got a burning topic here on receipts.
So somebody wants I forget what it was.
I don't know.
I was talking to somehow I brought up tax in a YouTube video and that's like, no, never
do that again.
Somebody said that you don't need actual receipts that they can just submit their bank statement
that just shows like, okay, I bought I went shopping at Target and it was a hundred dollars
and they were they were adamant about this.
It wasn't me.
You can't angry at me, Cheryl.
I'm just telling you that these are some of the misconceptions out there that you can
just submit your bank statement that really doesn't have anything itemized or anything
and you can get away with that.
There is actually a social media company that is helping accountants with their social media
and they provided a piece of content that basically said that that these bookkeepers
were putting out and then they were going back into the group going, why am I?
Why are people telling me I can't do this?
It was on your stuff.
I'm like, what kind of bookkeeper account are you that you don't know that I know the internal
revenue code that says it's not good enough to have just a bank statement because the
bank statement does not itemize what you actually spent the money on and the IRS is going to
want to see what you actually spent the money on because they're going to say, oh, well,
you actually only spent five dollars on some pens and the other ninety five dollars was
your groceries.
So we're not doing the ninety five, but we'll give you the five for the pens for your business.
So let's say this.
Let's say in my bookstore, I've sold a book.
Somebody gave me one dollar for it.
Do I report that one dollar because it was cash?
Do I do I or do I or do I do report that one dollar because it was cash?
Because there's an interesting concept if cash was done, you don't have to report it.
So the way that I look at it and obviously this is going to be a moral thing for everyone
because there's no proof.
Right.
Cash changed hands.
There's no way to prove it.
The way that I look at it is I am running a business, so I want everything to be above
board.
So if I'm using Venmo, if I'm using Cash App, if I'm using cash hand to hand, I want to
count it.
But there's another reason I want to count it.
So because we're resellers, we're in a very like this is the best business you want to
be in if you want to get rid of crap in your house.
We go to the thrift stores and we buy something.
Like you might buy a box of books and you're paying like a penny on the on a book or something
like that.
But if you take a book out of your house that you went to the bookstore and actually bought
or you went to Amazon and actually bought, you might have bought it 20 years ago for
50 bucks and you decide to sell it this year.
And now this year it may only be worth a dollar, but you're going to run it through your store
and you're going to put it in your expenses as a book from your home, from your closet,
from your stuff and put the $50 on there and then go ahead and sell it for the dollar.
And if it never sells, okay, fine.
Now you pull it out of your store and you throw it in the trash or you give it back
to you know, you give it to a thrift store.
But everything that you decide in your house that you want to get rid of and I've been
purging some stuff here lately because for whatever reason, this concept did not cross
my mind until recently.
So I've gotten rid of a ton of stuff that I did not run through my business first.
But yeah, if you run it through your business as a yard sale, Facebook marketplace, hand
to hand, whatever, a flea market, it doesn't matter.
If you claim the cash, then it's just part more part of your business.
It's just like eBay and Amazon and all the rest.
So I claim the cash.
Good answer.
I like it.
So you, you know, other people, oh, why do I got to pay taxes on something I already
bought?
That's like the big argument when the whole $600 things come out as, well, I got this
couch that I bought 20 years ago, I don't have a receipt and I sold it and it was over
$600.
And now I got to pay taxes.
Like, how is that fair?
So like, what you're saying here is, okay, maybe you bought a book 10 years ago.
And if you're going to write it off on your taxes, do you still need to have the receipt
from the time of purchase, even though it was 10 years ago?
Nope.
Okay, fair enough.
I was just curious.
No, you don't and that's, that's why we as a re as resellers are in a very unique situation
because no other business can do that.
We get to do it because we're resellers.
I want to talk a little bit about there's like, at least all that I know of, there's
like two different ways to track your inventory.
It's like accrual or cash, right?
Are those the two like that you can either track?
All I know is I do the easy one.
Yeah, the accounting methods.
You kind of want to give a quick little inside look at, you know, each one of those and which
one you think resellers should probably use.
Sure.
Cash, it's simple, it's easy.
And everybody, if they're, if they are claiming that they're doing accrual and they're doing
line by line accounting, they're all doing it wrong anyway.
So just go to cash and, and forget the rest.
Is that fair enough?
The big difference is like with accrual, you, I don't even know.
It's just so complicated.
Here's the thing.
If you're going to do a cruel, which means you're with resellers, it's a super headache
because in order to do it right, if you go buy a hundred things from the thrift store,
you need to come home and put those hundred things into your expenses and into your inventory,
into your inventory.
You don't get to claim any of that stuff.
None of it.
You put it into your inventory.
You haven't even listed it yet.
Now you, you decide, okay, now you're going to go wash it or, you know, look at the book
and make sure it's actually a good thing.
And you find five of your books.
There was mold in them.
You can't sell them.
So now you have to go back and take out five of the entries.
You are ready to put the time in for.
And those five entries, well, they're not going to take them out.
You're going to leave them there and you're going to make an entry that you are going
to throw them away.
So they're not going to be listed, but they can be moved from your inventory into your
expenses because at the amount that you paid for them, because they were not worth selling
after you bought them.
And then you finally get through the rest of them and then you go take your pictures
and then you get them listed.
And then, you know, half of them never sell.
So you do at some point in time, you're going to have to take the other half of them and
put them over there for the amount that you paid for them.
This might be, you know, a year or two or five years from now when you decide to purge
all your stuff and all your bad purchases.
And so that's money that you could have claimed all that time ago against the income that
you made that year.
But you didn't do that.
You took all the extra time to do all the different line by line stuff.
And people think that because they have put in all these things line by line, that that's
actually their bookkeeping.
But it's not their bookkeeping.
They've got a whole ton of extra expenses on top of that, that they're not even thinking
about.
So on top of that, if you're going to do accrual for your inventory, then you have to do accrual
for everything in your business.
So if you buy a pack of paper, for example, and say the pack of paper was ten dollars
for a hundred sheets, for 500 sheets, that's however many sheets.
So you literally are supposed to count the number of sheets that you use and you're only
paying for, you're only expensing what you have used, not the...
You got to be nuts.
Not a fun game.
But I do have a fun game for you, Cheryl.
I don't want you to go into nuances.
I just want a true or false that I can report it for taxes.
Okay.
We'll start easy here.
Yes, true.
All right.
Not what's in the wallet, but the wallet itself.
Did you buy it to sell it?
No, my own personal wallet to use to put my stuff in.
No.
Oh, sadness.
Cell phone.
Absolutely.
Love that one.
Coffee.
No.
Oh, haircut or beard cut?
Are you in your photos?
Oh, you.
Not yet.
Wait, wait, wait.
You are making an income from this podcast where you are in the video.
Yeah, there we go.
You're drinking your coffee.
We talked about the coffee cup quite a bit.
There you go.
Now it's an expense.
Okay.
I want to cut in on this now because she just put you onto this new game.
You're going to save some money.
What about my drink I got at the gas station on my way home from the thrift stores?
Oh, that's a hard one.
It's not a hard one.
It's it's a I disagree with that one.
So that goes in.
You said this was true, false, yes or no.
So we're not going into the nuances.
Sorry about that.
So that's a no.
No, sorry, Mike.
What about my Halloween hoodie that I wear and YouTube videos and on the podcast?
And it's become part of your brand because it's like you're like into the whole Michael
Myers thing.
I mean, I do have a Michael Myers emo on the YouTube.
He wears them fairly.
It's like my coffee cup.
It's like in every episode.
So there you go.
Yes.
I guess like what's the what's the gray area when it comes to like uniforms and food, right?
Because I don't go people are going to say, well, I need clothes to go to the thrift store,
right?
I'm not naked out there scanning books.
I got clothes.
And what about like what if I'm out and about and I want to stop at Chick-fil-A and get
food for myself?
Like I know it's kind of like a gray area.
I'm just curious like what your take is when it comes to uniforms and food expenses for
a reseller.
OK, so when it comes to for a reseller, just reseller, when it comes to just a reseller,
then.
No clothes.
No.
What we can get away with, though, is because if we buy things that we wear for a little
bit and then list, then we can, you know, we can still take them.
We just can't take them when we first buy them because we can't we can't take our clothes
as we have to wear the clothes we have to eat.
So unless you have.
Some other way of adding a reason for that expense, you can't take it now as far as food
while you're out.
There is no mileage that says how far you have to be away from home for it to be considered
travel meals.
The way that I interpret it is.
Back when Chris Lynn was working like a couple of miles from his house in the storage unit
in California, it was like ridiculous to try and get, you know, that couple of miles.
It was like hours of time.
Right.
I would totally feel comfortable with him taking his lunch.
But for me, it's, you know, what in my area, if I leave my area, then I can take.
I could take my lunch or I could take a meal.
But if I'm within my area and I've got a couple of thrift stores that are near me, then I'm
not going to be taking meals that day.
I'm going to I'm only going to take it if I'm out and I go outside of my area and I'm
gone all day long, then I will.
I will take a meal.
So here's a fun one.
You hear all the time the term tax brackets.
What's the best tax bracket to be in?
Or is there a best tax bracket to be in?
One where you're paying nothing.
There we go.
I like that answer.
What's that one, Cheryl?
I want to get to that one.
That one is not waiting to the last minute to do your bookkeeping and your taxes.
That one is paying attention to everything that you're doing all year long, having someone
that you're talking to on a regular basis so that you can find all of the things and
add in the things so that you are reducing your gross income below your standard deduction.
So I'm going to ask probably a higher level one as some people a little bit more advanced
that listen to this.
So at the end of the rainbow, how we keep the most money, I see a lot of corporations
do this, they become what's called a conglomerate and they're basically all funneling the chain
business with all these little sub businesses that provide the main business.
Is that the best way to, well, as you put it, not pay taxes or have zero taxes?
Or is there an even better way than doing the conglomerate route?
So for smaller businesses, that route is very difficult to get to, number one.
Number two, FinCEN, which is the Financial Criminal Enforcement Network, they put it
into law several years ago.
It's actually mandated for this year that if you have an LLC, if it was started prior
to 2024, you have this full year to fill out their paper saying who actually owns the business.
So people have to come out of the shadows?
Yes.
And if you start the business in 2024, you have to do it within, I think, in 60 days,
maybe 30 days.
But yeah, so there are actually, I've talked to several, there are actually lawyers and
CPAs that are finally saying no to LLCs and trying to steer people away from it because
they don't want to have any parts of it.
Because what happens is if a lawyer or an accountant or myself was to help you fill
out this paper and sign off on it, now if you change your name, if you get married,
if you move, if you do this, if you do that, if you go to the bathroom wrong, then they
are now responsible for making all of the updates on that form.
And if they don't make the updates, then they're the ones in trouble.
That sounds horrible.
I don't like it.
I don't like it either.
But it's a good point to bring up because a lot of people always ask, people that just
start reselling, it's always, oh, should I get an LLC before they even sold their first
month of stuff?
So for me, I've always operated as a sole proprietor.
So what's your take on LLC versus, because you see it all the time, I need an LLC before
I even start reselling.
What's your take on the sole proprietor versus the LLC route that seems to be like, I don't
know, the official cool, like, oh, I got an LLC, right?
Like, I don't know, like, what's your take on it?
So my take is, this is the hill I will die on.
People seem to think that being a sole proprietor is not a business.
It's absolutely a business.
You have less oversight.
So I prefer less oversight.
Like, quit, quit, you know, needle and diamond, they quit looking over my shoulder.
I don't need your, I don't need your help.
Uncle Sam, go away.
I'll take care of this.
Got it.
When you, when you start an LLC or an LLP or a C Corp, or you get designated as an S Corp,
it, what it has done and why they're all so, I want you to do this is because of all the
income it creates for the person that's trying to talk you into it.
Then they get to help you do, then they do the paperwork for you.
Then they set you up for all this stuff.
And now you're set up for all this stuff and they never explained to you what was required.
So now you've gone a whole year and it's time to do your taxes and you didn't know that
you had to file an informational return and you didn't know that it was going to cost
you an extra, who knows how much they're going to charge you for, for, you know, the, because
you have an LLC now or that they got you designated as an escort because that was going to help
you with your, with your taxes and you didn't do payroll all year because you didn't know
you were supposed to.
And now you've got fine.
You're going to get fined an extraordinary amount of money because you didn't do payroll,
but you did take distributions.
And then I'm talking to people that have all this has happened to, and they're like, what?
And you watch the color drain from their face.
So true.
I mean, even in business, people get the types of corporations all confused.
And I lean toward what you're saying there, the simpler, the better.
And there's whatever benefit you're trying to get over here, like with the corporation,
because I see this from LLCs trying to become a corporation from a sole prop, trying to
call it a corporation.
You can get it elsewhere and still be a sole prop or close enough.
And I don't think a lot of people realize that.
Right.
You're, you're exactly right.
And that's, that's part, I probably say that in almost every call that I'm on is like,
what?
A sole prop is still a damn business.
Yeah.
People lack it off.
It's still a business.
You may have to fill out an extra form to get the tax break that shiny S corp over here
got, but whatever.
It's still the same thing.
Really?
Um, I have done a lot of taxes over the years and I'm not going to say that I am, that I
know everything.
Cause I, I, I first to admit, I don't know everything, but I have sat down with scenarios
that these people in YouTube land will come up with and say that the S corp is going to
save you money.
And I haven't figured out how it actually does it yet.
Like they'd leave out a bunch of stuff in the middle.
And I've sat down and done it as a, as a sole prop, done the taxes as a sole prop on paper
and then done them as a S corp.
And um, yeah, I don't get it because if you're doing an S corp where you have to pay yourself
a payroll, now you have money that you have to pay taxes on before you spend it.
How is that a good thing?
This is all, listen, so proud all the way.
And that's what I've been in from day one.
I'm already sitting over here confused S corps, all this other stuff like sole proprietor
is just the, I mean, no, because this is the reality of most people and I'll be, I see
it all the time on Instagram.
Oh, hire your kid, hire your cat, be an LLC, you know, join the circus.
You'll save all this money in taxes.
There's so much out there and sole proprietor is just the easy straightforward way to kind
of get yourself in, understand what you're doing.
Sure.
Maybe if you're doing millions of dollars, maybe there is a benefit to go on this route
when it comes to certain things.
But listen, none of us are this type of hot shots yet.
You're perfectly fine being a sole proprietor.
You're going to be okay.
And yes, you are a business.
So if you were saying something and I was wanting to, oh, well, let me, let me hit this
one at least.
So an LL, oh, LLCs and sole props do their taxes the exact same way on a schedule C.
But the LLC has to pay more money into the, has to pay money into the government to have
an LLC and has all this paperwork hoops to jump through.
So you're doing your taxes the exact same way.
There is no difference in what you are allowed to get or what there's no nothing.
Everything is exactly the same.
If you are selling something like toys that to kids where there could be a liability,
maybe you want to think about having an LLC.
Maybe you want to consider having some type of umbrella insurance.
I'm actually going to talk with a couple of people this week about umbrella insurance
and make sure that I'm understanding it correctly.
But that would be one thing in the reseller word HBA, something like that, that could
cause possibly cause harm to someone that you might want to protect yourself from.
Like my sister friends, they just slip and fall and bust their head open and bleed on
my floor in my books.
But yeah.
So, so there's that.
There's another one that if you are going to get involved in real estate, always buy
real estate through the business.
Always start an LLC for the property before you buy it.
That's the one time that I will say absolutely do an LLC.
So I got a fun one here.
Because there's a lot of husband and wife resellers.
Are they still considered a sole prop if there's two of them and they're 50-50 partners?
No, they're LLPs.
There we go.
They, and also what they say they are and what is on the paperwork with the platform
is different.
So you and your spouse could be working together within the business, but only one of the spouses
is actually on the 1099 that comes from the platform.
And that's perfectly fine.
That one spouse is the one that's going to go on the schedule C and all the expenses
are going to go through it.
And the other spouse doesn't have to be there.
It's considered a family business.
It's no, it's no problem.
Now if you want to start paying your spouse, then that's a whole different story.
And that's more time than we got.
Now what about outside of marriage?
Like just two people getting together, are they still an LP or are they something different?
I know the answer is that's what I'm asking.
That would be a partnership also.
And you would need to do the paperwork for it because you should always have some type
of contract for having a partnership.
But yeah.
What about vehicles?
Let's touch vehicles real quick when it comes to expenses because again, there's a lot of
misinformation.
Should I be doing miles?
Should I be writing off gas and repairs?
What if I go buy a Lamborghini for my book selling business?
Can I write off the purchase price of the Lamborghini if it's just for the book selling
business?
Like give me a quick little insight.
Well, it depends.
Did you buy it from your own personal Lamborghini?
I don't even know what you're talking about here.
So I bought, all right, I'm a reseller.
For some reason, my car explodes today.
Resale is my main source of income or I guess we'll do the main source of income first.
I go buy another vehicle.
Can I write off the purchase price of the vehicle?
That depends.
So I said earlier that the legislation is in place to retroactive 179 deduction to 100%
for 2023.
So there is the possibility that you could take 100% of the purchase price of the vehicle
depending on what the vehicle is.
If the vehicle is a 6,000 pound or more weight, gross vehicle weight, and if the vehicle is,
can seat at least nine people behind the driver or has a truck bed of at least six feet, then
you can take 100% of the purchase price up to the amount of business use.
So you still have to keep the mileage and you still have to keep all the deductions
because the mileage is going to equate what you're going to be able to get off the 179
deduction and it has to be at least 51% of business miles.
But you can't take actual mileage.
You have to take actual expenses for your vehicle.
So it gets kind of complicated, but it's huge.
If you've got the money in your business that you need that kind of a tax write off, it's
definitely a super viable option to reduce your gross income.
So let's take it a step further.
You're doing the normal accounting for your vehicle.
You get into a fender bender and you got like three grams of repairs to have done to get
your vehicle back up to snuff.
Are those repair costs a deduction or a write off of some kind?
Okay.
So that depends on whether you're taking mileage or you're taking actual.
And if you're taking actual, then you can write off the deductions that you pay for,
not what the insurance company covers.
And again, it's only based on the mileage of the miles that we're actually driven for
business.
So if you're only driving your vehicle 10% for business, then that's all you're going
to get is 10%.
So you can't correct me if I'm wrong.
You can't claim gas and miles.
You have to go one way or the other.
Yes.
Okay.
So that's what I was because of the thing, a lot of people kind of just, oh, I can write
off everything.
For me, I personally, I do the, well, not the miles one.
I do the other one.
I buy new tires for the Lamborghini.
It's a write off, things like that.
So I don't do the miles.
I do the actual, I guess, vehicle, I guess, upkeep cost.
Actual vehicle expenses.
Okay.
You still have to keep track of your miles.
Yeah.
So when tax time comes, you don't put the write off for the miles in addition to-
Right.
No.
So the key is, and the reason why I generally teach for people to track their miles is because
I have to get their head wrapped around actually tracking their miles before that I can get
them their head wrapped around tracking both.
And you have to keep them separate because we don't know which one we're going to use,
right?
Necessarily.
If it's the first year, then we still have a choice.
If we start out taking miles, we still have a choice.
If we start out taking actual, we no longer have a choice, but we still have to keep up
with both.
So- Go ahead, Johnny.
So outside of Excel, which I consider probably the best, what would be the program you would
tell people to use?
A pre-built program for keeping track of all their stuff they need to keep track of come
tax season outside of Excel?
And your tax document, of course.
Well, I mean, I was going to say first and foremost, it'd be my workbook.
I mean, I call it simplified accounting for a reason.
If you want an actual program, then I just got, I'm in the process of getting certified.
I am an accountant under Xero.
So I'm sure you've been hearing Xero because it came out of Australia and all these Australian
people are talking about Xero and it's like lying around the market, but it's flying around
the reselling community.
I hate that other company with a passion, the one that starts with a QB that's actually
a big I and has a shoot knees for the tax side of things.
I can't stand that company.
It's a huge trigger for me.
So don't use them.
Okay.
Whatever you do, don't go there.
It's too late for me.
I don't want you to go to H&R Block.
Just don't go there.
It's too late for me, Cheryl.
I'm a lost cause.
I understand if you block me after this, but unfortunately I'm on the dark side here with
QuickBooks.
It's kind of what I did from the beginning, five, six years ago, whenever I started this
thing.
So I'm stuck in prison, Cheryl, and I don't know if you can get any.
You're not stuck in prison.
And I guess I'm just going to have to spend more time in Discord learning how to use Discord
so that I can convert you over from QuickBooks to Xero.
Listen, I knew from your YouTube videos.
You're not a fan of QuickBooks and TurboTax.
So I'm like, I'm not bringing it up, but here we are.
I had it out myself here.
It's all right.
It's my fault.
I want to save you money.
Number one.
I want to save you money.
You don't even have to spend it.
I'm not asking you to spend it with me.
I just want to save you money.
So Xero is a lot easier to use.
They cost a lot less money and then you're not supporting this.
I feel about that company the way some people feel about Jeff Bezos.
But it's easier.
It's cheaper.
You can still pull all your stuff in and have the things.
But you can see it.
The thing that I don't like about QuickBooks and TurboTax is they hide everything from
people and you can't see what is actually working so that you know for sure that the
numbers are right.
And if I can't see it, I don't trust it.
It's basically just kind of like the whole idea of just dropping a bag of receipts.
You're kind of just doing that with QuickBooks.
I mean, it's basically the equivalent.
You just pay $30 a month to drop your receipts into their program.
I 100% understand that argument for sure.
And I mean, I can save you said 30 bucks a month.
I can get you into Xero for 15.
Say she's ready to go.
Should we push her affiliate link all over the place for Xero when the time comes?
It's not an affiliate link.
And you don't even have to work with me.
You just go get it.
Just go get it.
It's the future.
The kids, it's the future.
So, you know, again, you have to go into detail on this one.
Just a simple yes, no.
So we get forms from Amazon and forms for eBay telling our gross net.
Have they reported and accounted for everything?
Remember, yes or no, because I know this is a detailed answer.
It would take us like three hours to explain.
No, it won't take us three hours.
I can do it really quickly.
But I will tell you that eBay's got the best dashboard and tells you everything.
Yeah, there we go.
All right.
But now that you brought it up.
If you sell on Amazon or Poshmark, and I can't speak for the other platforms, but I can definitely
speak for those two.
If you sell on Amazon or Poshmark, I want you to go get your gross numbers and I want
you to take your net numbers and subtract the net that they actually stuck in your bank
account from the gross.
And then take all the chunk in the middle, the difference and put it in your bookkeeping
as expenses.
Yeah, there we go.
Because Amazon is the worst.
Amazon is hiding all kinds of stuff that they're putting on your 1099 so that they're trying
to get out of having to pay it.
That's exactly what they're doing.
They're putting all the stuff that they charge you all these fees for and they're putting
it on the 1099 because when they report the 1099, that's an automatic straight dollar
for dollar deduction off of their taxes.
Yeah, especially if you don't get a 1099 with Amazon.
All I can say is good luck, Chuck, figuring out those numbers because they don't have
no kind of easy reports.
They want you to export Excel sheets.
They're not sorted.
That's a pain in the butt.
Thankfully, since I've been selling, I do get the 1099.
So I do see the fee breakdown.
But if you don't, like you said, you have no idea.
And it's all fees with Amazon.
We all know Amazon's taking at least 50%.
So that could be a huge write off you're missing when it comes to being an Amazon seller.
And that's a good call out for sure because you're losing thousands of dollars in write
off just from that alone.
Right.
And I don't want to see anybody losing that money.
Now, Poshmark is not quite as bad as Amazon, but they are very, very similar in the fact
that your cancellations are still being reported inside of your 1099.
I believe it.
So do Poshmark the exact same way.
I mean, I know most of your people are booksellers, but a lot of them are crossed.
They cross over.
So yeah.
So yeah, gross minus net.
Take this stuff in the middle.
I do have a I do have a form for Posh.
I that will calculate all the little different things if you want to do all the stuff.
But I haven't built one for Amazon because I didn't have a access to the whole downloadable
big report in order to build one.
So all right.
Final thoughts here.
Final tips and tricks when it comes to taxes.
Maybe give us a few things that people you kind of already gave us a few like with the
cell phone and everything.
What are some common things that a reseller could write off that most people probably
wouldn't think they could write off?
All right.
So do you want to know the biggest one that people forget to write off?
Yes, we do.
The one that everybody argues about the most platform fees.
The subscription.
I'm absolutely serious.
People forget it.
I put it.
Yeah, it's like the cell phone bill or the Internet bill.
Yeah.
OK.
Yes.
You're talking like the eBay store fee or like the Amazon professional seller fee.
The big number that we were just talking about.
All the fees.
Yeah.
They forget it.
They forget the whole thing.
The whole kit and caboodle.
I'm like, hey, I'm looking at people's bookkeeping and I'm like, um, no, you got to be nuts.
Where's your platform fees?
And they're like, what?
No, no, no, no.
The number that you guys complain about having to get this fee all the time.
That's where the money is.
That's where all the money went.
That literally doubles your burden in an Amazon business.
If they're taking 50 percent and you don't write that off, you're literally doubling
how much.
I mean, that's mind blowing.
I thought it was I thought everybody knew at least you write off the fees you're paying
on the platforms.
But I mean, that's good to know.
They'll just take the net number, Mike, and then they're like, this is what I made and
it'll do nothing else.
Okay.
Then you just forget.
They're not even doing that.
Really?
They're not even doing that.
They're taking the gross.
They're reporting the gross.
That's even better.
They're reporting the gross and they're completely forgetting the platform fees.
Oh my God.
They're forgetting all the shipping, all the promoted, all the subscription fees, all the
stuff that they've been complaining about having to pay all year.
No wonder they're so angry on the floor.
No wonder.
They're doing their taxes wrong.
Oh my God.
All right.
So that's number one.
Number two, cell phone.
Number three, internet.
Because we are running online businesses, those are 100 percent deductible.
I don't care whether multiple people can be on the internet at the same time.
It doesn't matter.
We cannot run our business without it.
So those three.
Oh, continuing education.
These groups.
People forget to take these groups.
Doesn't matter what.
I can write it off.
Yeah.
YouTube.
Because most of what we do is learning from other sellers on YouTube.
So YouTube premium.
If you are putting your hands in your pictures or you're putting your face in your pictures
then like a manicure or Johnny was talking about, you know, haircut or a beard or a trim
or something like that, then those would be possible deductions.
Possible expense.
It's critical that you're writing this stuff down during the year.
There is an actual box on the taxes that you or your preparer have to check that says,
is it written?
Yes.
OK.
And it's the number probably one of the top things that the IRS will flag and audit you
on.
Oh, I have one that maybe you can give some clarification on cleaning supplies.
I don't care if you're working out of your home or like me in a warehouse and toiletries.
Are those?
So cleaning supplies, if you're working out of your home, cleaning supplies for your items
or your office space.
Absolutely.
We'll just leave that at that.
I mean, that's like a little bit like I can't write off the toilet paper I use.
Right.
So it's like kind of a gray area, I guess, when it comes to that type.
I guess the overall thing is you can't get crazy with some of this stuff.
Right.
Like, I mean, come on now.
It's like I wear it.
It's a reason she's giggling over there.
I wear a ten thousand dollar robe during the podcast that I got to buy and write off.
It's crazy things that go into it.
My dogs are part of my branding and they're my security system.
I mean, well played, Cheryl.
Well played.
This is why she gets paid the big bucks.
Where can people find you, Cheryl, for those out there wondering, like, where can you find
what groups are you in, like what kind of services you offer and things like that?
So for starters, I'm in y'all's group.
And she's over in the member's discord on the YouTube.
Yep.
And I'm not even a bookseller.
So but I am a member.
I am a paid member of the of that particular group.
I am in tech and sports reseller greatness group.
I'm in Chris Lynn's reseller Nirvana group.
I am in my simplified accounting with Cheryl group.
And so I have I have my own Facebook group that is free for anybody to join.
I will answer questions in there.
Please don't DM me.
I have my YouTube channel, which is YouTube at Saw Cheryl, S-A-W Cheryl, C-H-E-R-Y-L.
So most of my stuff is at Saw Cheryl in some way.
I think Instagram, which I keep forgetting even exists, is simplified accounting with
Cheryl, like all spelled out.
I have a TikTok that I'm desperately trying to figure out how to do.
But YouTube is my YouTube and Facebook are my favorites.
I go live Monday through Friday for a healthy chat.
And it's healthy mind, healthy body, healthy business, healthy finances.
It's like so you this morning I was on the treadmill while I was holding on to my laptop.
Yeah so and I have a paid membership group too.
And all of her links will be down below if you're over on the YouTube or if you're listening
on the podcast and you come over to the YouTube video, all her links will be pinned down in
the comments section so you'll be able to easily find out where she is.
I'm curious.
One thing when it comes to like your services, it's already February as a reseller.
I have no idea what I'm doing with taxes.
Is it too late to kind of reach out to you and have you help me and file my taxes?
It is not.
I still have room in my books for taxes, but I'm only doing taxes from February to March
if you want them in on time.
So I suggest if you want me to do them, I have a link in my link tree or you can reach
out.
I can give it to you guys either way.
But it's it you make an appointment.
It's not a face to face appointment.
It's a deadline for you to have your stuff into a drop box.
Once you make the appointment, I send you a drop box.
I send you I put a cheat sheet for a checklist into the drop box.
And that's the date that I plan on getting started.
So if you don't have your stuff to me, you forfeit your fifty dollar deposits.
Got to keep people accountable.
Yeah.
All right.
I think we're going to wrap it up there.
Cheryl, we appreciate you spending time with us and telling us the facts of taxes, not
just the crazy nonsense you hear out there on the Internet.
So yeah, if you're interested, you know, make sure you check out the link down below and
we'll talk to everybody in next week's episode.
Thanks.
Appreciate being there.
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