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Tax tips

chefmoseley

Member
Gold Member
Feb 26, 2008
493
0
This was forwarded to me by my director :) Hope it is helpful to you as well.

> KEEP MORE OF WHAT YOU MAKE
> Portions based on conference call training with Vicky Collins, CPA
Sponsored by the Direct Selling Women's Alliance

> As the owner of a home-based business you are entitled to a lot of
money-saving tax deductions. Vicky said that most direct sellers overpay
their taxes by thousands of dollars each year! There are usually two
reasons for overpaying your taxes:
> · Fear (of the IRS)
> · Lack of knowledge (not knowing what is deductible)
>
> Vicky stated that as the owner of a home-based business, you are
entitled
to these benefits - it's one of the major advantages of this business!
>
> She stated that the most important thing is to keep good documentation
for
your expenses. Take it from my own experience, if you keep track of your
expenses on a daily or weekly basis, you will be very thankful to
yourself
> when tax season rolls around. You can make up your own simple
spreadsheet
or purchase an expense log at any office-supply store. A great online
tool
to help you with all aspects of your taxes and record keeping is Quicken
> Home & Business (soon to be released as Quicken Premier).
>
> Here are some of the allowable deductions. Take full advantage of them
and don't cheat yourself - they are legally ours to take!
>
> SUPPLIES
> § Super Starter Kit
> § Super Starter Booster Kit
> § New Product Samples
> § Any products you purchase for yourself
> § Door Prizes
> § Hostess gifts
> § Envelopes, folders, pens, etc.
> § Bowls, bins or towels used for demos
> § Copies
> § Business cards
> § Stampers
> § Catalogs, order forms, etc.
>
> TELEPHONE
> § Telephone expenses (separate line for computer, or portion of
your
local/long-distance charges used for your business)
> § Long-distance calls to customers, home office
> § Cell phones (based on % used for business)
>
> POSTAGE
> · Hostess packets, thank-yous, flyers, etc.
> · Bills related to PC
>
> TRAVEL EXPENSE
> · Hotel costs
> · Monthly meetings
> · Out-of-town shows (airfare, etc.)
> · Meals (50% is tax deductible)
> · Taxi's or airport transfers
> · Tips for bellmen, etc.
>
> DUES AND SUBSCRIPTIONS
> · Cooking magazines, recipe clubs, etc.
> · Business related dues
> · Meeting and Conference registration fees
>
> ENTERTAINMENT EXPENSE
> (Entertainment and meal expenses are deducted at 50%)
> · Recruiting interviews
> · Planning meetings with spouse other consultants, etc. Be sure
to
document your agenda (If you meet for lunch with another consultant to
share
ideas, etc.)
> · Entertainment expenses. Vicky gave the example that if your
husband golfs, you can give him some catalogs to pass out at his golf
game,
and he can legally deduct his golf fees!

> HOME OFFICE EXPENSE
> · Office equipment such as computer equipment, fax machines,
calculators, scanners, etc. Percentage based on how much time it is used
for business vs. personal
> · Internet expenses - based on percentage of how much it is used
for
business
· Computer Software used for your business
> It is extremely beneficial to have your own "home office". A home
office
does NOT need to be a separate room - it can be a corner of a kitchen,
bedroom, etc. To qualify as a home office the area must be used
"regularly
and exclusively" for your business. When you have a home office you can
deduct the following:

> § A percentage of your real estate taxes, mortgage, and utility
bills.
> To determine the percentage, calculate the square footage of your home
and
your home office. Divide the footage of your home office by that of your
home. This is the percentage you can deduct. For example, if your home
is
2000 square feet and your home office is 100 square feet, you can deduct
5%
of your expenses.
> § Mileage to and from your shows.
> § Mileage to another job you may have, with restrictions. In
order
to take this deduction, you must do some type of Pampered Chef work at
home
before you leave for your other job. The tax law reads that you can
deduct
mileage "from your first job to your second job". If you are working on
Pampered Chef as your first job in the morning, then you leave for your
other job the mileage is deductible. This could be as simple as sending
out
a few emails or entering orders on your computer.
> § All computer-related expenses, considering that your computer
is
only used for your business. This includes internet connection fees.
>
> MILEAGE AND TOLLS
> · To cluster meetings, conferences, grocery store, post office,
bank, etc. For shows, check with your accountant: this may be deducted
if
you stop on the way for food or if you have a home office). See note
under
Home Office Expenses
> · Current rate is .375 per mile

ADVERTISING AND VENDOR FAIRS
> · Logo clothing, hats, pins, etc.
> · Newspaper ads, church bulletins or newsletter ads
> · Free gifts to vendor fairs, etc.
> · Vendor Fair booth fees
>
> GROCERIES
> § Any food you use to practice Pampered Chef recipes (According
to
Vicky, you can deduct grocery expenses more than once for a particular
recipe if you are working on "perfecting" it)
> § Any food you take to shows, meetings, etc.
>
> INTEREST AND FEES
> · Tax Preparation Fees (business portion on Schedule C at 100%,
personal portion on Schedule A - Itemized deductions)
> · Bank fees
> · Credit card interest that relates to any business expenses
>
> PAYROLL EXPENSES
> · According to Vicky, this is an incredible way to reduce your
taxes!
> If you have children between the ages of 6 and 18 you can pay them for
helping you with your business. There is some work involved, but the
benefits are great. You will need to get a Federal ID number (your tax
advisor can help you with that). Then you should pay your children a
normal
salary for age-appropriate work (i.,e., a 6-year old could be paid $5 for
stamping catalogs for 1/2 hour but not $50 for an hour of host coaching
calls!)
> · You can pay each child up to $4,750 per year. It is TAX FREE
to
the child, and FULLY DEDUCTIBLE for you,
> · You should write a paycheck to your child and document the time
spent and tasks completed
>
> RETIREMENT CONTRIBUTIONS
> · As the owner of your own business you can set up special
retirement plans for yourself. There are SEP's (Self-Employed 401K's),
Simple IRA's, etc. Contact your financial or tax advisor for details.
This is a great way to save money for your retirement TAX FREE!
 

gailz2

Senior Member
Gold Member
Jun 1, 2007
2,026
10
What a great, detailed reminder. Thanks for sharing!
 
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