Hello, I Am New to the Pampered Chef World (In My First Month) and I

[pampered in cincinnati]

Hello, I am new to the Pampered chef world (in my first month) and I was wondering how I would find out information about what is tax deductible in this business and how I need to organize that information to make the tax season easier to deal with. I would like to start off my business on the right foot in regards to taxes!

Thank you very much.

 

[pamperedbecky]

I don't know of any books out there that guide you on tracking tax write offs for your own business, but I'm sure there are some. I just know that I keep receipts for EVERYTHING business related. I keep track of every mile I travel (although sometimes I'm not as good about this!). Everything I buy for my office and I use for PC is a tax write off. Obviously all copies I make. Postage. Those are biggies. I bought one of those little expandable files that I put all my receipts in. Through Pampered Partner, there is a section where you can enter all of your expenses. I'm not as good about entering them every month, but I know they're all there in my little file. Even if you purchase a host incentive gift on someone's show, there is a way to enter it as "Consultant Gift" and then it asks if you want to add it as an expense. Matter of fact, ANYTHING you purchase on a show or a personal order can be listed as a business expense.

It does get easier to know what's a tax write off and to get into the practice of keeping track of it! If there's some book out there, hopefully someone will post the information since I'd love to know too! Thanks!

 

[gmosullivan]

You can even practice preparing recipes before a show which is very helpful and the food you use is written off as well.

 

[pampered in cincinnati]

Thanks

Thank you both so much! I am very excited to use your tips and I hope to enjoy a successful run as a consultant!

 

[proudmama02]

Do you file taxes quarterly or yearly?? and
Does PC send you any earnings reports or
send anything into the state/federal tax people??

 

[PamperedByJulie]

over $600

Do you file taxes quarterly or yearly?? and
Does PC send you any earnings reports or
send anything into the state/federal tax people??

PC sends an earnings report for consultants who make over $600 per calander year. That information is also reported to the IRS. There's no taxes paid on this earnings prior you doing your taxes, so if you're very successful expect to pay to Uncle Sam for federal taxes, medicare, and social security.

I have an Excel spreadsheet that I broke down into categories where I keep track of my spending by type (postage, office supplies, PC products, meals when attending training events, etc). This is my first year, so I'm not sure what all the IRS is going to ask for, but I figure that it's better to have all the information together. I also have a separate log for mileage that I keep with me so that I can update it when I'm in the car and not required to remember to do it later.

Does anyone know how long the IRS gives you to make a profit? I know we can't operate at a loss forever and that most of the time the first year is negative due to the initial expenditures. Thanks.

 

[PamperedGinger]

There are a lot of things that are tax deductible. You can deduct groceries you use to practice recipes; mileage to shows, stores, etc.; gas; stamps; etc.

I use Pampered Partner to track my expenses for taxes. I enter the info and save my receipts. At the end of the year I print off the report of expenses to use for taxes.

 

[proudmama02]

wouldn't it be easier to file quarterly?
I think you can also save your clothes that you buy to wear to your shows

 

[luvs2sellit]

You might already know this but you can deduct for your phone, internet, computer purchase (bought a new one this year), my office space ( there is a guideline of course for this, I think it is if you use it a certain percent for your business). Anyways, there are alot of things that you can deduct at tax time. Just keep your receipts.

 

[gmosullivan]

The office part is tricky. Check with an accountant. I think it has to be 100% of the stuff in it has to be PC. I heard that somehad a freezer in the office, no other place to put it and the IRS came and stated no duction and they had to adjust there back taxes.

I do go to an accountant for this and not sure the length of time for a neg. , but I do write off everything I can from new phone system at home to a new PDA cell phone, office furniture, computer, etc. Diners out discussions of PC business. Cleaning service when you use them for an open house that is PC related.