Question about taxes

[Cookin Kristen]

I started PC at the end of Feb, so I haven't done taxes yet. I have a FT job and do PC on the side. My DH keeps asking me about taxes?? How many of you out there have to pay taxes at the end of the year on your PC. My Director says she pays nothing. My DH thinks that is weird.....and I just have no clue! Please....help me out here. So I can intelligently tell my DH either way. Thanks!

[legacypc46]

I think your director means she files her taxes for her PC income, but with the authorized tax deductions ends up not having to pay on taxes on the income. (Hope that makes sense...typing fast)

[smspamperedchef]

It's not weird. There are a ton of deductions you can take with a home business! Office equipment, biz supplies, groceries to try new recipes, mileage. Also, listen to this from Carol Radu our Nat. Exec. this is VERY interesting!

· With the price of gas you might be wondering whether or not it’s worth it to drive to a cooking show or to your sales meeting. Don’t wonder anymore! The following is something that has been floating around online for a while so you might have seen it already. If not, it’s BIG so pay attention! The tax rebate on mileage for 2008 is 50.5 cents per mile. If your car gets 15 miles to the gallon, you will be allowed to deduct $7.57 per gallon of gas. If a gallon of gas costs you $4.00 to drive to your shows, you’ll come out way ahead of driving to a job at a mall or at the grocery store!

[ChefJWarren]

Plus its going up to 58.5 cents July 1-December 31!

[lkprescott]

So far, for the year, I'm at a loss for my PC business, so I'll not only not need to pay taxes so far, but I'll be able to claim the loss on our other income.

You'll be taxed on your net income which is commissions (revenue) less your costs of doing business and expenses (mileage, office supplies, bank charges, paperwork for your shows, postage, et al). It's laid out on an IRS form called a Schedule C which rides along with your 1040 along with your other schedules...

[KellyTheChef]

I started PC at the end of Feb, so I haven't done taxes yet. I have a FT job and do PC on the side. My DH keeps asking me about taxes?? How many of you out there have to pay taxes at the end of the year on your PC. My Director says she pays nothing. My DH thinks that is weird.....and I just have no clue! Please....help me out here. So I can intelligently tell my DH either way. Thanks!

If it will make your DH feel safer, do what I do. I set aside 10% of my commission for taxes. Then, when we do our taxes (I have never "owed" cuz of my business) even if my business has cut into our return, I have $$ set aside as a bonus!

If you are a stickler and keep EVERY RECEIPT possible, record all of your mileage (including to/from the grocery store when you buy stuff there for PC) and you "claim" any products given to you as a business expense it's pretty much that you won't end up paying. Hope that makes sense!! Now...I am sure that others who work PC as a FT job may have to pay...but I haven't hit that income bracket with PC yet!

[Cookin Kristen]

Thanks...all of you....for explaining it a little better. Now I can sit him down and explain it to him :) I really appreciate all the info on this site! I don't know what I would do without you guys! THANKS!!!!!!!!!!