Understanding Tax Commissions and Deductions for Your Business in 2006

[lyneya]

Obviously this could change for 2006, but as a general guideline, what rate are the commissions taxed when you submit your tax return? I haven't had any PC income in 2005, so I don't think I can deduct my initial start-up (bummer), but as I put some money into my new business, I started to wonder how much I would need to cancel out the tax on my future commissions.

That sounded more complicated than I meant it. Let's say that for every $100 I earn, the government wants $30 back. But if I can spend $30 building my business with deductable expenses, I could enhance my business significantly. I just want to know approximately what percentage we're taxed. Anyone know off-hand? Are our expenses deducted at 100%?

Thanks all!

ps. My first show is TONIGHT!!!!

 

[jenniferlynne]

Will you be doing your taxes yourself or having someone do them? I always do them myself using Turbo Tax. I didn't sell PC in '04, but I did babysit out of my home and had to count that. I ended up coming out ahead, because when you have a business that you run from your home, you get to deduct portions of your house payment, insurance, property taxes, phone bill, electric, gas, trash,water and square footage that was used for your business. Keep that in mind during the year and make sure you keep all your statements. This will help you a lot at tax time.

 

[lyneya]

I usually do them myself. I think I'll start using Turbo Tax though as our life gets more complicated. I'm one of those wierdos that actually enjoys doing my taxes!

 

[jenniferlynne]

Yeah, I enjoy doing them too. Last year, instead of purchasing Turbo Tax at the store, I just went to their website and did it. It was easier and cheaper. You also don't get billed until you actually file. It's a good way to try it out and see if you can do it on your own first without spending the money. It asks you questions in the beginning and will personalize it for you. It pretty much told me what I could deduct. I'm just wondering how easy it will be for me this year since I am babysitting and selling Pampered Chef. Last year it told me I had to enter some kind of a business code. I didn't know what it was, but was able to look it up on the internet. It accepted the code that I put in, so I guess it was correct. Turbo Tax also checks everything for you to let you know if you made any mistakes.

 

[jenniferlynne]

Oh yeah!! Good luck at your show tonight!!!

 

[lyneya]

Oh yeah!! Good luck at your show tonight!!!

Thanks! I'm really looking forward to it! It's girlfriends from work, so it should be fun. I'll tell them I have to practice my spiel. I don't feel like I'm really prepared, but it should be fine. I didn't want to be too rehersed or I'd feel wierd. Funny thing is that I wouldn't mind being more salesly if it weren't my friends!

 

[jenniferlynne]

When I first started out, I had trouble finding something to say the whole time I was demonstrating. Luckily, I made my family sit through a trial run before my first show. I couldn't believe how nervous I was and that I didn't even know what to say!! Now, I just try to keep talking about whatever product I am using. I tell everything I know about it. Sometimes when I run out of things to say while I am chopping something up, I will call on someone to tell about their favorite product. A lot of times it helps sell other products because the guests get to hear someone else talk about something that they are excited about. I had one show where the host went on and on about the microcooker (I hadn't even brought it with me) and I think I sold about 10 of them that night. Do you have any tips you are going to share? You might want to mention that you can put our stones in the microwave, and can even make a cake in 10-12 minutes (you can search this site for the recipes). You can also put bacon on the bar pan and cook it in the oven. 450 degrees for 15 minutes. I've sold several by telling people about that. The bacon comes out looking like it does on the Bob Evans commercials. Nice and flat and evenly cooked. Doesn't have all that fat on the ends. That is also a good way to season a new bar pan. Another good tip is putting egg yolks in the cheese grater when making deviled eggs. It is about 20 times faster than smashing them with a fork which is what I used to do. Our cutting boards can be bleached to keep them white (so can our rubber spatulas. they are not supposed to stain, but the handles do). They can also be sanded down with fine sandpaper to keep them smooth. If making cupcakes, use the medium scoop, and use two scoops of batter. That will make perfect cupcakes. That is all I can think of off the top of my head. I think if you do a search under "tips" you may find a lot of useful things. They do help sell more.

 

[lyneya]

Great tips! I'm definately going to incorporate a couple of those!!!

 

[jenniferlynne]

So, how did the first show go?

 

[lyneya]

So, how did the first show go?

Great! Only 6 people came, but we've had a few outside orders and there is still one more order before I can do the final tally and get the final numbers for the host benefits, but we're over $400 already! Not bad for a little show! The mystery host didn't quite understand how much she was going to get out of it. Now she's talking about ordering a cookware set with one of her 50% off items. Yay Pan-o-rama for me!

 

[pamperedbecky]

That's a great first show! Congrats. Especially because it was a smaller crowd. Tell her to spread the word to her friends how awesome the host benefits are. If you didn't get many bookings from the show, maybe she can drum up a few for you!