What is the difference between Shipping Collected and Shipping Costs

If you looks at the list of default categories used with Seller Ledger, you may notice that there are 2 categories with similar names: "shipping collected" and "shipping costs."

Shipping Collected

Shipping collected is a category we create by default to track any amounts that you as a seller charge a customer to ship him/her the item upon a sale. This is considered income for profit and tax purposes. The reason for this is because it's possible to charge a customer a different amount fort shipping that it actually costs to deliver that product.

When you receive a 1099-K at the end of the year, it will include totals for all shipping amounts you collected from your customers.

On your annual tax report, this category rolls up under Line 1: Gross Receipts Sales.

Shipping Costs

This expense category is where your actual costs to deliver items to customers get totaled up. And on your annual tax report, it rolls up to Line 1: Office Expense.