eBay hosts tax-preparation workshop Tuesday

eBay will host an online workshop for sellers with questions about filing their 2005 income tax returns.

The discussion, scheduled for 11 a.m. Eastern time April 11, will be lead by Cliff Ennico, host of the PBS television series "MoneyHunt" and author of the nationally syndicated newspaper column "Succeeding in Your Business."

Since March 30, Ennico has been answering some early questions at the workshop board. For example, he recently posted this exchange:

How do I calculate the "cost of goods sold" for my business?

Basically, this is whatever you paid to your vendors for stuff you sold on eBay during 2005, plus (1) all eBay and PayPal fees, (2) all shipping and postage costs, (3) the cost of packaging and shipping materials, and (3) any sales taxes you PAID for your inventory. If you collect a “shipping and handling fee” from your buyers to cover some of these expenses, see below for a discussion of how to treat that on your tax return. If your “cost of goods sold” is too difficult to track and you don’t have a lot of inventory left over at year end, you probably won’t get into too much hot water with the IRS if you deduct your selling costs outright. As you get bigger, however, you should learn to do it the right way.