I use paypal to receive subscription payments at my site (and in the past for eBook sales). My question is, does it matter how i account for the paypal fees (for tax deduction purposes) ? currently I record the gross amount of every transaction. then at the end of each month i add up all the fees and record them as bank-charges. but doing it this way is a PITA .. Could I just record the net amount of every transaction instead? Does it matter? how do YOU do it?
get a bookkeeper. It's the easiest way. PayPal fees are expenses and should be tracked as such. I can't think of any easy way to do this. You could just add up the net amount and subtract it from the gross to get your fees. Not any less work. I always wondered why PayPal sucks at giving us some good reports for this type of thing.
Yes I agree with nicknick...there's no reason Paypal should not be able to keep track of it better. they probably fear that if customers actually see how much money paypal grosses off of them they'd freak out
if your not making an extra 10k a year dont report anything. they wont do anything about 10k their worried about amount like 30k plus. so dont report anything unless you have in the past.
Yah, i'm way over both of those amounts, so i'm being very careful to report everything.. PayPal makes it very difficult to keep good records.