Will Selling Pampered Chef Affect My Taxes as a Consultant?

jtjacaldwell · Dec 29, 2006

I've been a consultant since March & my husband has me worried about our taxes. He seems to think that selling PC will hurt us this year when we file our taxes. Are there any PC veterans out there that can give me some tips?

jrstephens · Dec 29, 2006

I am not a veteran - started in April of this year.

You will have to pay taxes on what you earned from PC. They do not withhold and just send you a 1099.

I have a special account set up that I withhold the taxes from each check and put it in for year end.

I have also been told that any prizes and bonuses you earn they add that to your 1099 and you have to pay taxes on them too. Unless you know how to write them off.

Hope this helps some, but this is my first tax year with PC too, so, I do not know for sure how it all works.

chefann · Dec 30, 2006

There are quite a few threads on this topic, so you should be able to find a lot of information if you do a search.Things that you buy for your business are deductable as a business espense: postage, food for demos, mileage to shows/meetings, office supplies, paperwork, products to demo, conference registration, meals and hotel at conference, logo clothing, business cards, etc. Keep receipts so that you can document. There's a place in Pampered Partner where you can enter everything as the year progresses and then just print a report.

jtjacaldwell · Dec 30, 2006

Thank you, I'll see what I can find on the threads.

cmdtrgd · Dec 30, 2006

I signed in October of 2005. After my three Super Starter months I had earned $1500 in commission and products. When I did my taxes, I got back an extra $500 because of my business. So, because I was able to claim EVERYTHING that I possibly could, I actually got $2000 in cash and prizes! I didn't have to pay a dime on the commission and products I earned! I'm looking forward to this year's taxes because I was able to take a few road trips to do shows and see family and friends!

lisacb77 · Dec 30, 2006

Kate, did you then claim the SS items you earned since you are using them in the biz? I thought I read that somewhere on here.

mbh06 · Dec 30, 2006

Can you claim the SS items?? They are used as part of your buisness... And if I purchased items on my own can I claim them too??

cmdtrgd · Dec 30, 2006

I didn't because I didn't know how. Now I do. What you do is claim every product you earn by saying you are reinvesting it in your business. Same with PC dollars and pretty much anything except for a trip - although, if you can pull it off, let us know how!

mbh06 · Dec 30, 2006

My husband and I do turbo tax and it is soooo easy. I would recomend it to anyone espically since a lot of places that do taxes are really hesitant to do too many deductions. Turbo talks you through everything and will tell you what you can/can not do. We have never had problems and we get more than we would w/ someone else doing our taxes. It is all legal so don't worry that you are cheating the gov't. I know this b/c my in-laws own their own buisness and have been audited and they didn't have any trouble. (They couldn't even find some of the reciepts and were okay)

PCJen · Dec 30, 2006

If you choose to use a accountant you can write off the fee for next years taxes.

chefjeanine · Dec 30, 2006

mbh06 said:
Can you claim the SS items?? They are used as part of your buisness... And if I purchased items on my own can I claim them too??

I claimed the SS items and now I claim any products I earn for free because I use them in my business. If I don't earn all the new products for free and have to purchase some, I claim those too.

lisacb77 · Dec 31, 2006

Thanks Kate, that definitely helps! So do you just have a list typed up somewhere? I did make a chart of all the bonus products I earned and values, so I could keep a copy of that with my Turbo Tax print out and other reciepts to prove.

I can prove I reinvested my PC dollars. I used it on a supply order!

cmdtrgd · Dec 31, 2006

HO will send you a form with all the commission you earned as well as every product and incentive you earned in 2006.

chefann · Dec 31, 2006

FYI -- if you have a Costco membership, they just sent out a coupon booklet that includes a $15 coupon for Turbo Tax in January! Woo-hoo!!

Bexs50 · Dec 31, 2006

Ok this might be a stupid question but I know nothing about taxes. I just purchased a laptop this past week. I am on a payment plan and will not have it payed off before tax time. Can I still claim it even though it won't be payed for?

cmdtrgd · Dec 31, 2006

I believe you can claim what you have paid so far. Then, when you do your taxes for 2007, you can claim the rest.

jrstephens · Dec 31, 2006

I am so glad to hear you can write off SS and Bonuses. I know that will help me alot. Can someone explain exactly how it is done? Do you just lump the market value in with your business expenses all together? Or do you break them down on the Schedule C in some way?

I went and bought a table I have been wanting all year in case a host does not have one today so I could get it in for this years deductions. And a file cabinet.

fruit76loop · Jan 3, 2007

Trip

cmdtrgd said:
I didn't because I didn't know how. Now I do. What you do is claim every product you earn by saying you are reinvesting it in your business. Same with PC dollars and pretty much anything except for a trip - although, if you can pull it off, let us know how!

Hey there ladies! This will be my 4th time filing taxes for Pampered Chef. I prefer to use my CPA as she is up with the current tax laws and such.

I put all of my income and expenses in Pampered Partner and print it off and give it to her. If you are good about keeping receipts and records it will pay off!

Last year was the first year I showed a profit. My 1099 last year had over $19,000 on it between commissions and incentives. I only showed a profit of $1099 for tax purposes.

I thus, paid self employment taxes on this that were $78.

And yes, I can write off MY half of the incentive trip!!!

Because when you go on an incentive trip you are always chatting about PC! When I was in Vienna, a couple other consultants and I took the train to Salzburg and chatted the whole way back (3 hours or so) about PC...Our husbands were in another car...sleeping!! In Disney World, there was a bunch of us chatting in the pool at 2 am about PC!! My accountant said my half of the trip could be written off because of this!

Many people are afraid to not show a profit with a business, but by tax law, you have 5 years that you can show a loss. Keep good records and get good tax advice so you won't have to worry if you get audited!!!

Wonder how much my trip to Vienna is going to add to my 1099 this year?? I bet that trip was worth a lot!!!

braveslady · Jan 4, 2007

This will be my 4th year filing taxes with my PC biz - I prefer TaxCut over TurboTax (have tried both). To me, Turbo left some things out and I had to go back in and add it. TaxCut asked all the right questions and made things very easy. I think there is a publication you can order from the IRS that is strictly for home-based businesses (do a search on their website). Also, my exec dir told me that you can also deduct your cable or satellite bill (or a portion of it, based on the square footage of your office - the computer calculates it all for me!!) because of Food Network!! I watch that often and use tips I've learned at my shows!

fruit76loop · Jan 4, 2007

Never thought of...THAT!!! WOW, I will have to ask my CPA about that. Because the Food Network is always on at my house...along with QVC. If you haven't watched QVC for business give it a try! When you start watching a product on there...you are like What is that? and Why would I want that?.....But by the end of the show you are searching franticly for your credit card before they are all sold out!

Thank goodness I usually can't find mine!!

mbh06 · Jan 4, 2007

My husband hated QVC until we bought our laptop on 4 easy payments that do not require a new credit card to show up on our credit report!
Question: I can claim groceries paid for, milage, my laptop, PC products I purchased, SS items, what else am I forgetting???

pamperedgirl3 · Jan 4, 2007

mbh06 said:
My husband hated QVC until we bought our laptop on 4 easy payments that do not require a new credit card to show up on our credit report!
Question: I can claim groceries paid for, milage, my laptop, PC products I purchased, SS items, what else am I forgetting???

Any office supplies: paper, tape, markers, pens, etc., envelopes, postcards, postage, any PC clothing...

fruit76loop · Jan 4, 2007

Home office?IF you have a home office, which is designated in the tax law as a space, no matter how small, that is used exclusively for business purposes, then you have many more write offs!

Home mortgage
insurance
gas
electic
phone
water/sewer
cell phone
internet
garbage
anything bought for your home office (furnishings, flooring, paint, decor)

advertising (this includes PC logo wear)
travel expenses (motel, flights, food, cab fare, parking fees)
meals (opportunity meetings, cluster meetings ALL MEALS ARE WRITTEN OFF AT 50%)
$2 business insurance that the PC charges us
cooking magazines, cookbooks
books (The best quick kitchen tips etc...)

hmmmm...what else....

jrstephens · Jan 5, 2007

I had forgotten about the $2 insurance that they hold out! THANKS!

ltkacz · Jan 5, 2007

All I have to say is...Having a home based business - pays you big at tax time. Last year when I gave all my information to the CPA - his first words to me when he completed my tax return was "congrats on having a home based business, it's paid off big time". My tax return last year was twice as much as it would have been without the business. For that reason alone, I don't ever see giving up my PC business.

dannyzmom · Jan 5, 2007

ltkacz said:
Having a home based business - pays you big at tax time. Last year when I gave all my information to the CPA - his first words to me when he completed my tax return was "congrats on having a home based business, it's paid off big time". My tax return last year was twice as much as it would have been without the business. For that reason alone, I don't ever see giving up my PC business.

Geez - I need YOUR accountant...mine screwed me last year..

ChefAlicia · Jan 6, 2007

You may certainly write off the full amount of the computer in 2006 income taxes even though you are making payments on the computer. It is a matter of when you bought it whether with credit card or jpayments which is a loan does not matter yo still purchased it in 2006.

Jennie4PC · Jan 6, 2007

my pc business did not help us last yr either but it didnt hurt us although I think we should have gotten more back then we did

chefbria · Jan 7, 2007

Yes you can still claim it.

Countrykitchenmichelle · Jan 7, 2007

Bexs50 said:
Ok this might be a stupid question but I know nothing about taxes. I just purchased a laptop this past week. I am on a payment plan and will not have it payed off before tax time. Can I still claim it even though it won't be payed for?

This one is tricky, I tried to do this one when I consulted a few years ago. This was considered an item that had to amoritized (no clue how to explain that), but essentially it meant you couldn't deduct the total purchase in the buying year, it had to be spread out over a few years. Way over my head, so I skipped it.

Will Selling Pampered Chef Affect My Taxes as a Consultant?

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