Tax Deductions for 'Other Income' Received from Pampered Chef

[beepampered]

I received $1500 in "other income" from PC last year. I'm assuming this is the products I earned in SAT and other incentives. How can I write these off since I take them to shows to display. What catagory would this fall under? Advertising? Can I do 100% or should I take a percentage since some do go into my personal kitchen usage (although many are still in the original box). Thanks for helping out this tax-doer trying to get it all done before Spring Break. Sigh.....

 

[mrshamel3808]

Anything you use even in your own kitchen can be a write-off, since you could say you're using it to practice recipes to demo (if you EVER do that). I included the "other income" in the gross reciepts & sales of the Schedule C.

 

[chefann]

I enter the other income items into P3 individually (HWC apron as one line item, spring SAT items as another, etc.), and then create a corresponding expense item for each entry, with the word "reinvest" to indicate that the item is being used for business purposes and is therefore an expense. When DH filled out the Schedule C, those expense items went into the office expenses category (I think - the Schedule C line items don't exactly correspond with the categories in P3).

 

[mrshamel3808]

Chefann, I think I'm going to edit my expense categories to match the Schedule C. I did my taxes with the help of a tax lady (she's a family friend), and she had me include the other income in my total gross sales and receipts, and office expenses were only office supplies. Seems like because the categories are pretty broad you can do it multiple ways. I wish the IRS would tell us which they'd ideally prefer.

 

[beepampered]

Thanks for your input. Seems like an awful lot to write-off, along with my mileage, business supplies, recipe testing and more. I love the write-offs but don't want a red flag to get an audit...I use TurboTax which prompts me so I'll have to find that line item.....

 

[mrshamel3808]

I only write off what I have saved receipts for and then mileage so if I get audited I have everything to prove it. All businesses write off expenses so I don't think having so many different categories will cause them to audit you based on that alone.

I combined some categories under supplies. All my kit enhancements, sample orders, and personal orders all went under supplies. Recipe testing went under "show expenses" in Part IV along with anything else I spent for that show (copies of recipes, invitations, etc.)