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eBay business, use personal bank acct, etc - problem?

lisavetalisaveta subscriber Posts: 8
Hi, I`ve been selling on EBay for just over a  year now, 2006 was a loss, 2007 will show a small profit I think. I have just been using my personal bank accounts and credit cards for all my expenses and monies in. Is this a potential problem? I do have receipts for everything. I am thinking of getting another credit card, just for business use, thinking it will simplify things for me. Do you think I should have a business acct at a bank, too? I want to keep costs down, of course, so don`t want to pay a monthly banking fee. Any words of wisdom? I am in Canada if tht makes any difference to your answers.


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    LizardWisdomLizardWisdom subscriber Posts: 0
    As you are in Canada, we don`t know what the laws are there. However, we can speak from a US eBay seller prospective. Actually, as a business owner of any type of business, you NEED to have a business checking account.
    One of the ways the IRS determines if you are a "real" business (as opposed to having a business as a hobby) is how you deal with your finances. The rule is that you have to have your business and personal funds separate. NO intermingling. Using your personal checking account for business purposes is a HUGE red flag. If you are ever audited in the US by the IRS, you most likely will find yourself in a tight spot.
    Our advise is to always check with an accountant to make sure that you are handling your business affairs properly. We are not tax professionals, so anything we say must be taken with a grain of salt (that is our disclaimer - check with a professional).
    You mentioned that you don`t want to pay monthly banking fees. We have a business checking account at Washington Mutual that is absolutely free. Of course, we are in the US, so maybe there are no banks in Canada that offer free business checking.
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    grabitpackgrabitpack subscriber Posts: 5
    hey lisaveta
    I believe it depends on how much money you`re making on ebay.  Is this your main line of income or just something you do on the side?
    If it`s just a side thing I wouldn`t be concerned with "intermingling".  If you are a consistent POWERSELLER then I would consider using a regular bank (or online bank like ING Direct which is free I believe) for your business and a credit union (usually free) for your personal accounts (if they have them in Canada).
    You may also want to check with COSTCO or SAM`S CLUB since they offer small business services at very low prices.
    I would stay away from a separate credit card as much as possible unless you really need it.  I do everything ebay-business related with my paypal card that is connected direct to my ebay sales,  that way I have a monthly statement on business expenses plus I get a little cash back per transaction and it`s not related to my personal accounts unless I want to deposit.
    Good luck with your ebay business!
    ps at least in Canada you`re not getting destroyed by Health Care costs.  I just got out of medical debt since I lost my insurance a few years ago.  I could have put a lot of money aside for retirement with that money.  thanks George W!!!!
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    lisavetalisaveta subscriber Posts: 8
    Thanks I will look into the PayPal credit card, and low-fee bank accounts up here. Our banks gouge us more here, don`t think I`ll find free.
    I have a day job, but by this time next year I project I will make as much from my own business. This year I think my profit will be like $1500. I am a Powerseller, as of last month.
    Yes medicare is good...of course some complain our wait times for surgery, etc, are too long, but at least you don`t have to worry about having no coverage. Of course, our taxes are much higher, that`s where the money comes from. : ) Our postage costs are double-triple what they are in the States, which makes the US a better place to "eBay" from.
    Don`t believe Michael Moore...we do all lock our doors, we have school shootouts, too, and there are many who find our healthcare lacking...though all in all our social safety net does make things run more smoothly and safely I think.
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    grabitpackgrabitpack subscriber Posts: 5
    Never been a Michael Moore fan. 
    I was just venting.
    So you sold over 100 items per month for three months and made $1500 profit for this year?
    If this is the case I wouldn`t concern my self over another bank account.
    If you plan on quiting your day job and plan on kicking butt next year with your ebay business (care to tell us what it is, promotion always helps) then I would consider another bank account.  Talk it over with your accountant would be the best advice.
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    mytechdirectDOTnetmytechdirectDOTnet subscriber Posts: 2
    Check out Credit Unions for your business banking, if you have a way to become a member. A lot of Credit Unions have made it very easy to become members these days, if you have any that are close, you may call just to see.
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    lisavetalisaveta subscriber Posts: 8
    I sell natural spring water in beautiful limited edition bottles, factory sealed, for example the Evian 2008 Christian Lacroix bottle. You can see my wares here: http://search.ebay.com/_W0QQsassZpremium_luxury_water
    If anyone is interested, they can email me directly at pontalexander@Hotmail.com, and I can give you a better deal. But please put StartUpNation somewhere in your subject line, so I know it`s not spam or phishing. Thanks!
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