Tax Deduction for $1,100 Cooking Products Invested in My Business

[Intrepid_Chef]

As many know, I was the recipient of $1,100 in cooking products ... which is all being invested in my business.

How do I note that on my taxes? Is there some kind of statement I need to draft for my accountant? Last year, I didn't get a 1099 but I printed one off consultant's corner and it showed the heart dish ... I told her I invested it into my business and it didn't seem to fly ...

 

[vwpamperedchef]

Contact HO ---for a more definite answer!

 

[chefsteph07]

It will be listed on this years 1099- you can write it off as an investment as well but then you do have to pay taxes on what you won so it will be listed as income, I know this because I won a few years ago.

 

[pampered.chris]

they should be able to count that. Or maybe you need a different accountant. My accountant tells me that it will be considered income, but is a wash b/c it will also be considered as business supplies. or something like that.

 

[janetupnorth]

You need to talk to an accountant. You did not pay for the supplies such as when you purchase supply items for business. You won them. Anything over $20 or $25.00 I believe that you get as a prize at "work" has to be claimed. So, that is claimed as income. Now if you give something away, mark it in your expense record as an expense. If you use the items at shows, you'll have to talk about how to claim that part.

 

[Intrepid_Chef]

That's what I mean ... I use them at shows. (Or give them away.)The heart dish showed up on my 1099 as "income" even though I didn't buy it last year ... I earned it by having 2 shows in December.

 

[janetupnorth]

That's what I mean ... I use them at shows. (Or give them away.)

The heart dish showed up on my 1099 as "income" even though I didn't buy it last year ... I earned it by having 2 shows in December.

Yes, it is on all of ours, all those incentives are because of your statement. You EARNED it for having two shows...that's the government for you. PC has to follow the rules.

 

[cathyskitchen]

It's a tax law - any earned income and incentives are included in your taxable income for the tax year. You can write off things you BUY, but you can't write off things you EARN, unless you end up donating them to a charity.

 

[DebbieJ]

I deduct all the products I earn as a business expense. I use them in my business and give them away as gifts. My accountant has never questioned it.

 

[jenniferm]

It's a tax law - any earned income and incentives are included in your taxable income for the tax year. You can write off things you BUY, but you can't write off things you EARN, unless you end up donating them to a charity.

You can deduct these. You won the products but you are using them in your shows and giving them away so they are a business expense. You can even deduct the cost of the trip you earn because it is a "business" trip, you are networking with others in your line of business.

 

[janetupnorth]

Basically, keep excellent records of where and when you gave the products away. Also, have a good accountant if you don't know what to do.

 

[missyciccolella]

You can write that off...make sure you talk with an accountant who is knowledgeable about Direct Sales. My director writes off her earned PC trips because of the amount of business that is discussed on them. Bottom line find a reputable person who deals with these type situations on a regular basis. On a side note all "earned" products through sell-a-thons, etc can be written off too. HO gives us the opportunity to earn them for free for our business...I'm not saying they are not income, or to do anything shady, but you would be surprised what can be claimed as a write off at the end of the year.

 

[KellyTheChef]

I claim it as earned (incoming $$ or product) and then claim the products as business supplies (so it's "outgoing") so it's a wash for me too.

 

[chefsteph07]

I claim it as earned (incoming $$ or product) and then claim the products as business supplies (so it's "outgoing") so it's a wash for me too.

I do the exact same thing

 

[Intrepid_Chef]

I've been told by many people that I can do this ... but I think just to be sure I will call my accountant so I can ask about this ... if she isn't knowledgeable, I want to know NOW so I can switch to another accountant who is familiar with direct sales. My director friends have written off the incentive trips they earned.