Well, I Guess I Made a Profit ....

[Intrepid_Chef]

Just did my taxes and though the return is good, I didn't go as well as I had hoped. Even with a dependent and two direct sales businesses, I still ended up "making a profit." Which is a good thing, I guess ... I am just used to a nice tax writeoff from a losing business, and I didn't have much money to show for it!

The culprit, for the most part, was a medical study that reimbursed me for my time and travel, but hit me with a 1099 at the end of the year. Also, it didn't help that the 1099 I printed from the web site showed my PC dollars as "income" and therefore my income exceeded the cost of my kit! Never mind that I never spent them!

So next year, when I SPEND my PC dollars, can I write off the expense?

 

[raebates]

I'm told that yes, you can write off any items you purchase for your business. So, those SAT items, which show up as income, can also be deducted as a business expense. It's as though they paid you a commission, then you spent it on supplies.

 

[crystalscookingnow]

When you spend your PC dollars, you are re-investing them in your business, so Yes!

You can also write off the value of any products you receive as a reinvestment.

 

[Intrepid_Chef]

You can also write off the value of any products you receive as a reinvestment.

How do I do that?The SA heart dish counted as "income." I am tossing it in a gift basket I'm giving away, though, so how do I prove that?

 

[crystalscookingnow]

I'm not sure! LOL....I just know that you can. Maybe make a document of what you give away as a consultant gift or donation?

 

[raebates]

It's like you purchased it as a demo piece. Does that make sense? Even if you don't give it away.

 

[sfdavis918]

Just record it as a normal expense. The value of it (what was shown as income on your 1099) would be the expense amount. It would be the same as purchasing a SA heart and then giving it away. Think of it as the actual dollars are behind the scenes (like cutting out the middle man).

Did that make sense? Sorry, I am in a fog from my cold!

 

[chefann]

That's right. And you do the same with SAT items. If your 1099 says "Sell a Thon, $100" then you create an expense item "SAT reinvestment $100."

 

[GeorgiaPeach]

Also....it's good to show a profit every few years. If you take a loss a certain number of years in a row (not sure how many), your business is then considered a hobby....which (I think) means no more tax deductions. That's what they told me two years ago so last year I didn't claim all my deductions so I could show a small profit.

 

[raebates]

Now, see, The Furry Guy prefers to see that I'm making a profit. Otherwise, he feels like I'm just spending money on my PC habit.

 

[kh8740]

I think if you are giving it to a church or non profit for raffel they they should give you some kind of written recipt on letter head for donation.

 

[Intrepid_Chef]

I think P3 lets me create expenses ... am I right?I'm not giving the dish to a non-profit ... I'm giving it to the customer who won my drawing. Although she hasn't returned my calls so if I don't hear from her by Monday I'm going to draw again ...My accountant says you need to make a profit after 3 years in business. This was my third year with Previous Product Line and my first year with PC. So while I'd have to make a profit with the previous product line if I'd stuck with it, I'd get two more years to lose money with PC before I'd have to start turning a profit.

 

[crystalscookingnow]

Yes, you can create expenses in P3. I would use the dish giveaway as a consultant gift & put in there who you gave it to.

 

[chefsteph07]

That's right. And you do the same with SAT items. If your 1099 says "Sell a Thon, $100" then you create an expense item "SAT reinvestment $100."

That is TOO COOL...I never knew you could do that...I'm scrounging to come up w/ a few more deductions...or else we are going to take quite a hit bc I made a profit as well, and didn't spend so much on the business as I usually do..