We are not tax professionals so we encourage you to contact an accountant for more clarity, but here is the gist. "Shipping" is treated like anything else in GoDaddy Bookkeeping. If you have more Shipping Income than Shipping Expense, that counts toward your Profit, and you will need to pay taxes on it. If you have equal Shipping Income as Shipping Expense (that is, you didn't charge your customers more than you paid to ship an item), the net total won't affect your Profit, but there's still a record of it in GoDaddy Bookkeeping.
* Shipping Income is the amount you charge a customer for shipping in order to ship that item to your customer.
* Shipping Cost is what you actually end up spending in order to ship an item to that customer.
Shipping Income will be imported by your eCommerce site. For example, Amazon, Etsy, PayPal, etc.
Alternatively, if you have shipping setup through your eCommerce site, then you're shipping costs will also be imported. However, if you ship your items by yourself using USPS, UPS, FedEx, Stamps.com or any other shipping service, you will need to either link your Checking/Credit Card that you use to pay these costs in order for them to import.
If you do not want to link your Checking/Credit Card to GoDaddy Bookkeeping, you'll need to manually enter in your Shipping Costs in order to properly reflect your shipping expenses. The first time you go to the Post Office and pay with the card, you'll see a charge show up in GoDaddy Bookkeeping, probably under "Uncategorized". You only need to classify this as the category as "Shipping Cost" one time, and from then on every time you visit that same Post Office, GoDaddy Bookkeeping will automatically put it in your Shipping Cost category. The total you spend on shipping for the year will also show up on your Schedule C under "Other Expenses".
For more information regarding how to automatically categorize transactions in GoDaddy Bookkeeping, please refer to the article located HERE.
PLEASE NOTE: UPS Shipping transactions cannot be automatically categorized since they are imported with the Tracking number each time, and as such, the payee name will be different every time these transactions are imported into GoDaddy Bookkeeping.
The main thing to remember is that if you end up collecting more Shipping Income than you spend, that counts toward your Profit. If you have equal Shipping Income as Shipping Cost (that is, you didn't charge your customers more than you paid to ship an item), the net total won't affect your Profit, but there's still a record of it in GoDaddy Bookkeeping, even if it nets out to zero.
NOTE: Do not merge the categories "Shipping Income" and "Shipping Expenses" as these categories are created by your eCommerce site and merging them will cause your linked eCommerce site to stop importing.