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  1. Great points. I stupidly fell into the “lots of inventory” at the end of my first calendar year of reselling. Luckily lots was still not very much in the big scheme of things, but I forgot accounting 101, I viewed that inventory as a liabilty, whereas inventory is really viewed as an asset (which can be liquidated if necessary).

    Point being, come December, don’t start buying up a ton without a plan.

  2. Mr. andrewdoronin I appreciate the recent articles as it relates to reselling. This one is especially helpful.

    How would you handle an item where you made a sale and it’s returned, but the object in question no longer operates? It will be disposed of since it no longer works and theoretically has no warranty.

    • This would reduce your profit for the year. How you actually implement it would depend on your accounting system in place, but unlike unsold inventory, destroyed inventory would be written off to reduce profit.

  3. If you pay yourself out of the corp or llc via payroll (w-2), you can always do extra withholding on the last run of the year. This can work around the problem of not having made sufficient estimated payments. Of course the corp pays extra payroll tax too if you weren’t going to pull that money out via payroll, but it could beat paying a penalty depending on your numbers.

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