Tax report overview

The Flipwise Tax Report gives you a breakdown of all of the data you need to prepare your yearly tax return. It includes both revenue and expenses from sales across all marketplaces as well as any general business expenses and credits you have manually logged in the Ledger or that Flipwise has ingested for you automatically. Unlike the Income Statement, the Tax Report also includes all non-cash expenses, like mileage, logged in the Ledger.

Additionally, the tax report is designed to update automatically, ensuring it always reflects any changes to your data relevant to the specific tax year. There's no need to manually generate a new report or take any additional steps—your report is always current and up-to-date with the latest information.

What data is required to prepare your Flipwise tax report?

In order to prepare an accurate Tax Report, Flipwise needs to understand several datapoints from your inventory across unlisted, active, ended (unsold), sold, and donated/discarded. If you have been logging this data in Flipwise already, your tax report will be a breeze to generate! If you have not, Flipwise will tell you which data it needs in order to prepare an accurate tax report.

Purchase date

All items purchased prior to the end of the tax year should have a valid purchase date defined so that your starting and ending inventory value can be calculated, as well as the total spent on new inventory.

Additionally, all items marked as donated or discarded in the tax year should have a valid purchase date defined so that your starting and ending inventory values can be calculated.

Purchase price

All items purchased prior to the end of the tax year should have a purchase price in order to calculate an accurate starting and ending inventory value, as well as the total spent on new inventory.

Additionally, all items marked as donated or discarded in the tax year should have a valid purchase price defined so that your starting and ending inventory values can be calculated.

Shipping cost

In most cases, Flipwise will ingest your cost to ship automatically. In some cases it cannot due to limitations on the eBay side. If Flipwise has not ingested your cost to ship automatically, you will need to enter it manually in order to prepare an accurate tax return

Tax report terms and definitions

Below is a breakdown of terms and definitions for the various line items shown in the Tax Report. Not all line items will appear on every tax report; if the value for a line item is zero, it will be excluded.

Business income

Business income on the Flipwise tax report shows the total of all gross revenue including sales from all marketplaces and additional miscellaneous revenue Flipwise has automatically imported from eBay or you have manually logged as a credit in the Ledger. This represents your total business income for the year.

Gross sales revenue

Gross sales revenue includes the gross revenue from all sales from all marketplaces you sell on. For eBay, this amount should match the gross sales amount on your eBay 1099 if you received one. However, there are some scenarios where the gross sale amount reported by Flipwise on your tax report does not match what is reported by eBay on your 1099.

If you have logged any sales manually from non-eBay marketplaces, those will be totaled up and included as additional line items under Gross sales revenue.

Additional revenue

Additional revenue includes any additional eBay credits automatically ingested by Flipwise, or manually entered by you in the Ledger. 

Misc. eBay credits most commonly are funds that were placed on hold due to returns, but later reversed by eBay.

You may also see shipping label adjustments appear here if eBay issued credits for any shipping miscalculations in your favor.

Inventory and COGS

The Flipwise tax report supports both cash and accrual inventory accounting methods, and will show you all inventory expense data no matter which method you use.

Starting inventory value is the value of your inventory on January 1 of the given tax year. This covers all items purchased prior to the start of the tax year including those that are currently unlisted, active, ended (unsold) and sold. If a product was marked as donated or discarded during the tax year, its cost will also be reflected in your starting inventory value.

Spent on new inventory is the total purchase price for all items across unlisted, active, unsold, and sold with a purchase date within the given tax year.

Ending inventory value is the value of your inventory on December 31 of the given tax year. This covers all items purchased prior to the end of the tax year including those that are currently unlisted, active, ended (unsold), and sold. If a product was marked as donated or discarded after the tax year, its cost will be reflected in ending inventory.

Cost of goods sold (COGS) is the total purchase price for all items sold in the given tax year. This number includes the purchase price for all items marked as donated or discarded in the given tax year.

Business expenses

Business expenses on the Flipwise tax report shows the total of all fees across all marketplaces you sell on, shipping costs, and any additional expenses automatically ingested by Flipwise or logged manually in the Ledger. This represents your total business expenses for the year.

Importantly, business expenses on the tax report do not include inventory costs, because those are included in the Inventory and COGS section above.

Total marketplace fees

Total marketplace fees totals up all fees across eBay, as well as any fees you have manually logged as a part of non-eBay sales.

Total shipping costs

Total shipping costs totals up all shipping related expenses, including any shipping label adjustments that resulted in additional charges, as well as any return shipping label fees. Any shipping costs you have logged as a part of manually recorded non-eBay sales will be included in the total as well.

Additional expenses

Additional expenses includes any eBay expenses unrelated to shipping or marketplace fees automatically ingested by Flipwise, as well as expenses you have manually recorded in the Ledger. Importantly, Ledger expenses will include all those marked as non-cash, such as mileage. 

Order refunds is the amount you returned back to the buyer when an item was returned. Partial refunds without a return are also included in order refunds.

Misc. eBay debits most commonly are funds that were placed on hold due to returns. Often they are later reversed, which will be accounted for in Misc. eBay credits under Business income above.

Downloading your tax report

On the right side of your Flipwise tax report (or below if you’re using a small screen), you will see a Download button. Clicking this button will generate a zip file containing several CSV files (shown below). These files contain the raw data used to prepare your tax report, as well as a CSV of the tax report itself. If you’re working with a CPA to file your taxes, this zip file will contain everything they need.

• flipwise-YEAR-tax-report.csv: Your tax report in CSV format.
• flipwise-export-starting-inventory.csv: Your inventory at the start of the tax year.
• flipwise-export-inventory.csv: All products purchased during the tax year.
• flipwise-export-sold.csv: All products sold during the tax year.
• flipwise-export-disposed.csv: All products donated/discarded during the tax year.
• flipwise-export-ending-inventory.csv: Your inventory at the end of the tax year.
• flipwise-export-marketplace-fees.csv: All marketplace fees incurred during the tax year.
• flipwise-export-shipping-label-transactions.csv: All shipping label transactions recorded during the tax year.
• flipwise-export-misc-ebay-transactions.csv: Misc eBay transactions recorded during the tax year.
• flipwise-export-ledger.csv: All ledger entries recorded during the tax year.
• flipwise-export-refunds.csv: All refunds issued to buyers during the tax year.

If you would like to check the totals shown on the tax report against the raw data contained in the CSV files above, refer to this help article explaining how to do that.