Okay, I'm in Ss2 and I Have Never Done Any Sort of Direct Selling

[redd3708]

Okay, I'm in SS2 and I have never done any sort of Direct Selling Business 'til now.
I don't want to seem pathetic but what do I do when tax season comes? I've never really filed taxes, my Husband does it so I don't know how it works. (I know that's really bad! )
I mean, I know there are a lot of tax write offs and I have a lits of what they are but what do I do when it is time to file my taxes? Do I keep my receipts throughout the year to show the "tax people?" So far I haven't kept any?!?! Print out bank statements??? What do I do?

I don't know how it works! I need help. PLEASE!

 

[kat29]

Okay, keep all your receipts. Write your mileage to all your shows down. There is a section in the Pampered Partner you can put this stuff in at. Print out all your commission statements and file them to where you can find them. I know I've was told by my recruiter you won't get a something from PC at tax time if you make over $600 dollars. Then it is your Business expenses minus your profit. You may have someone like H&R Block do all that stuff for you when next year rolls around. Just take all you receipts with you. You'll file the same time everyone else files their taxes. If you need more info I know they got some on the Consultant Corner and IRS.gov can tell you a little more too. Hope that helps.

 

[lacychef]

PC will send you a 1099 (or whatever it's called), it will tell you what you made the past year, including any bonuses or freebies. (they're considered taxable income) Save all your receipts: groceries used for practicing recipes, office supplies, conference expenses; there's also reports you can print from PP at tax time, showing expenses like supply orders, kit enhancement, products you've ordered, etc.
I'm not very good at taxes either, so we take ours to a local accountant. I just feel it's worth it, that way I know it's done right. They know all the write offs that you can use; such as also we use a percentage of our utilities since I have a home office. 2 years ago when I bought my new computer, he even let me use that as a write off, since it's mainly used for business. I will say, H&R block was WAY more expensive than our accountant. It cost about $200, compared to $90.
Hope that helps some

 

[redd3708]

My Dh was telling me that I'm going to end up oweing the IRS since I am making commission and not paying taxes. How does that work? All this is just making my head spin. I feel really dumb for not saving past receipts.

HELP! *grin*

 

[soonerchef]

I have never had to pay taxes due to my PC business...actually, I have always gotten back more than I made because of mileage, product purchases, groceries, clothing, etc. Last April I claimed more than $3000 in expenses. Just keep track of everything and you will be fine.

 

[lacychef]

Like Andrea said, just save, save, save those receipts. If you work another job besides PC, do you have taxes taken out? The year we had H&R block do our taxes, we actually had to pay in. (that was so horrible! I was working 3 part time jobs at the time & wasn't making enough money at each one to have taxes taken out) Now at my other job (family operated mechanic shop-I'm a bookkeeper not a grease monkey ) I have a little extra taken out at each payday. That way it helps cover not paying out of the comission checks. If you have another job, I'd recommend that. Now we've been getting a nice refund the past couple of years. Don't worry too much about it, just start saving receipts now!

 

[Harrle]

Okay now I will ask a dumb question - when they say you should 'break even' what exactly does that mean? Does that mean the total write offs AND mileage should equal the commission you make in that year?? Or is there more to it?? I have always shown a loss and I know they say you shouldn't do that every year??

Thanks,
Leea

 

[gilliandanielle]

Are you supposed to add up all your reciepts at home and bring in the total to H&R block or bring the shoebox of reciepts!?? I didn't claim anything last year!! Not ONE write off! Also the H&R block woman said I have to file my taxes as a business and it cost $300 to file! With my personal taxes it came to over $400. We got a refund of over $8000 though so that didn't really matter.

 

[maryhenderlite]

We purchase the Turbo Tax (deluxe) program. It costs roughly $30-60 depending on the "model" you choose. It asks you all the right questions, and as long as you know how much things are, (it explains things, such as what deductions you can take for each line/form) you just input them in. We e-file which cost around $15. As long as you e'file before Wednesday, usually you will have your return on the following (10 days) Friday (direct deposit). We save quite a bit this way.

It is amazing to me that all the "tax places" charge so much. You can get the program, and do it yourself. And there are lots of publications and instructions on the IRS website that can help you out. Just my 2 cents.

 

[Jennie4PC]

We also do the turbo tax which is nice but sometimes my husband wont claim certain things cause he is to scared. but owell what are you to do

 

[PampMomof3]

I used TurboTax this year and it was my first year filing while working as a Direct Seller. I found it extremely easy but stressful because you want to make sure everything is right!

 

[redd3708]

Which one of you use Turbotax.com compared to the program? Which is better? We've always used the online version....is the software better?

 

[lacychef]

Are you supposed to add up all your reciepts at home and bring in the total to H&R block or bring the shoebox of reciepts!?? I didn't claim anything last year!! Not ONE write off! Also the H&R block woman said I have to file my taxes as a business and it cost $300 to file! With my personal taxes it came to over $400. We got a refund of over $8000 though so that didn't really matter.

The first year when it cost so much, I just took my receipts in & they added them up & separated them.
After working with my super organized MIL, I've taken some advice from her. I now separate my receipts into groups...office supplies, products, etc--and I go ahead & add them all up. It saves the tax man time, which saves me money! I'm too worried about doing something wrong, so for me it's easier to have the accountant do it. (plus I just don't have time-I want my refund asap!)

 

[gilliandanielle]

Thanks Lacy. I would just hate for the tax preparer to see me coming in with my shoebox and sighing. I don't want to make their life hard! That Turbo Tax sounds good though. Do you keep up with it all year, or just save reciepts then do it at tax time?

 

[maryhenderlite]

If you put all you expenses into Pampered Partner, then do an expense report at the end of the year, it should have everything on it.. Just make sure you put in the correct dates.

 

[gilliandanielle]

Thanks Mary!

 

[maryhenderlite]

you are more than welcome!!

 

[rsmpta]

hmmm i sold creative memories for a while and never filed anything on any of that.....do you need to make a certain amount in commission to "need" to file the PC stuff??

 

[maryhenderlite]

The IRS gets a statement from each company that pays you commission (if that co. is doing things right) if the amount you "make" is over 600 (i think) you will receive a 1099, however if you do not make that much you still have to report it, and pay the taxes on it (legally).

The IRS will not know about amounts (less than the 600) unless the company itself gets audited. If you didn't report the wages, and it is enough to send up a flag to the irs, it could take them several years to catch it. Don't mean to scare you, but I have seen it happen. They will "catch" it after you file your taxes, hold your refund, and then you will have to file the previous year's (whatever year it was) and then it takes like 4-8 weeks for that to process, them take out taxes owed+penalties+late fees, then you will be issued your current refund.

It is a pain in the butt, but if you did "make" over 600, then they should have issued a 1099, and you should have reported it, along with all your expenses.. Most of the time,, we can claim a loss because of all the expenses, just don't want to do that EVERY year.

 

[rsmpta]

If i remember correctly...i never got a 'check' from them. UNLIKE PC (which is part of the reason i decided to sign up with PC) you have keep a 'product line' from which to sell from. You get to order products at a discount and the difference is your 'profit'...and i sold so little that i quit pretty quickly...to much CRAP to keep up with...because customers expected you to have the STUFF they ordered when they ordered it kwim? and you can just buy one of this and one of this..you have to buy a box of 3 or whatever...so i ended up with a bunch of junk....

Maybe i need to tract expenses better...

 

[gilliandanielle]

My CM consultant said that she doesn't make any money at all, but she loves the products so much that as long as she doesn't spend more than she would buying it from someone else then she doesn't mind selling it. She doesn't carry inventory and gives TONS of stuff away at scrapbook retreats. She just has fun and doesn't care about making money....as long as she breaks even. She runs her business like I would love to run mine!

 

[erinyourpclady]

We also use Turbo Tax and have done so for years. Our rule for deductions is...if I don't have a receipt, I don't claim! I keep telling myself that I need to import my expenses into PP but I don't! LOL! Every few months, I group them together and then in January I type up a spreadsheet for my husband.

The most I have ever paid for taxes on my PC business is about $200. You can expect to be in the red your first year as you are generally building your business and making purchases to grow that business. I was told that you need to show a profit 3 out of 5 years for your business not to be suspicious.
That being said....$1 is a profit!

Christine~ I find VERY helpful as well to use only my PC bank account for PC purchases. That way, if I do lose a receipt, I have my bank statement! It was very helpful to do that when we were overseas as I was always losing my toll reciepts!

HTH~
Have a Pampered Day!

 

[gilliandanielle]

My "making a profit" do you mean claiming less than you were paid? Can't you always claim less than you made to not look suspicious? I am sorry for all the questions, but taxes are NOT my strong suit!!