Taxes With Pampered Chef and Full Time

[sizzo]

I work Full time and just started PC. I am a receipt keeper already by nature. The question I have is are you considered self employeed if you have a PC business. Also, is there a loss factor or something for 3 years to even be considered to have a business I thought I had read that years ago? Lastly when do you have to claim PC earnings after they reach a certain point?

 

[esavvymom]

Yes- you would be self-employed. You are an independent consultant. You do not work FOR Pampered Chef.You will receive a 1099 around the same time you'd get a W-2 from your employer. If you make more than $600- you'll get the 1099. It will include all commissions paid, as well as any incentives you earned (ie- free products or gifts you earned- they'll include those for the retail value). I'm not 100% on the years of loss thing- that would be something to check with IRS, but I think the general rule is about 2 years of loss before a business may be looked at as a Hobby by the IRS....but don't quote me. A tax person or better yet- the IRS website, may better answer that one. BUt you are a business from Day 1- even with a loss. It just is how many years can you take a loss on taxes before they get suspicious and think it's a way to reduce the tax bills. And in case you weren't aware, you can use P3 to track your expenses and add your receipts. Then at the end of the year, you can run a report and it's done! I created my own categories too, plus after a big broo-haa with my husband last year on the taxes and what categories I assigned...we matched up the categories with the IRS. I'll see if I can dig that info up to. It makes it easier when I run the report then he can just plug it into the right category without trying to figure out what is where.

 

[ShellBeach]

Yes, you are self-employed.

You need to look at Schedule C
http://www.irs.gov/pub/irs-pdf/f1040sc.pdf

And Schedule SE
http://www.irs.gov/pub/irs-pdf/f1040sse.pdf

You're on your own if it's hobby vs a business on 3 out of 5 years, ask the IRS and take down the date & person's name when they answer you.
Write down your mileage every time you drive to the store for recipe practice, post office to mail anything related to PC, to hosts for shows, to fairs/booths, delivering product.

One thing that is not obvious from those IRS forms, you can write off recipe practice. Save your receipts from that.