When you have a small business on eBay, it is best if you fill out all the forms and pay your taxes on time to keep you from encountering problems with eBay business audits. In addition, it is also important that you keep good records for your business for future references. When you have all your records kept somewhere with you, filling out the tax forms will be easier for you because in the event that you get audited, you will have everything that you need ready. Aside from taking notes of your business' gross expenses and sales for your returns by the end of the year, there are still several state-related responsibilities that you have to take control of: state sales tax, data recording for your employees and payroll taxes quarterly.

The first thing that you need to handle in case surprise eBay business audits happen is the state sales tax. The very basic thing that you need to know about this is that you are only allowed to charge tax when your customer is in the same state as your business and if in the first place, your state has a sales tax. If you do not have to bother with this thing, you must consider yourself very lucky. Otherwise, there are several steps that you can follow to be able to handle it properly and easily. The most basic tip for you if is to keep all your sales tax that you get in a different bank account so that it will be readily available if the need to send it arises. Another advantage is that when a seller collects sales tax, he/she immediately gets a tax ID number that is issued by the state; this in turn will allow the seller to buy wholesale merchandise that they can sell on eBay.

The second thing you have to be responsible for is the employee data. Now most people who have businesses in eBay only have one or two employees however there are those that have around 15 employees to take care of. Whichever case would be applicable to you, do not worry because the process is still the same - you can run your own business with your own social security number. But in the event that you have already hired employees, you already need to get an Employer Identification Number or EIN. If on the other hand you will need to hire a new employee, the first thing that you need to get is their social security number and ask them to fill out a W-4 form that will indicate the number of deductions to be taken from their paycheck.

Lastly, you do not want to make mistakes when dealing with your taxes and that is why it is really advisable to use programs that will help you in managing them. These programs will eliminate all the hassles you have to go through just to fill out the forms; in just a short span of time, you can already generate a report that will include all the information you need in a given period of time.

It is safe to say that taking care of all the mentioned aspects of your online business can help you in handling properly all the eBay business audits that will come your way in the future.