When Can I File Taxes? Important Information for 2021 Tax Season

[ahammons]

Since I didn't make $600 in commission this year, so I won't get ... can't remember the form. Anyway, I'm sure you know what I'm talking about! lol

So since I won't get one, I can file taxes whenever I'm ready, right? DH's forms will be ready around the middle of Jan, and we will probably need to use some of our return to get his plane tickets to come home in Feb. I want to make sure we get it done asap!

 

[ahammons]

another one..Doesn't P3 have an option to run a report showing how much you made??

 

[RebelChef]

Figure it both ways, with the income and without. Even if you didn't make $600, you may have enough expenses that you have a loss and will get more money back by including it. You can take a loss for, I think, 2 out of 3 years before the IRS considers it a hobby and denies your deductions.

 

[Kitchen Diva]

Figure it both ways, with the income and without. Even if you didn't make $600, you may have enough expenses that you have a loss and will get more money back by including it. You can take a loss for, I think, 2 out of 3 years before the IRS considers it a hobby and denies your deductions.

The IRS just sucks the fun out of everything, don't they? Of course I spend more than I make...isn't that the American way? LOL

 

[RebelChef]

lol Yes, they do. It's not hard to spend more than you make in a new business where you're having to buy tools, office supplies, etc.

For some reason, those numbers don't look right so it may be 3 out of 4 or even 4 out of 5. I just can't remember tonight for some reason. One good thing about it, you can claim a profit one year and go back to losses again the next, if your business records support it. It helps alot that we get mileage. Hubby claims mileage every year and it gets us about a $20,000 deduction or more. Now I can do the same and get even more. Maybe the IRS will owe us for a change. lol

 

[sfdavis918]

I'm not sure how long you have been at PC, but don't forget that any free product you have earned will also be included in your income. So lets say you made $500 in commission and earned a free pan in POR worth over $100 then you will get the 1099 (that's the name of the form ).

 

[RebelChef]

Cash bonuses are considered income, too. unfortunately. The IRS just had to stick their nose into that one. lol I remember when a bonus was a bonus and you got the whole thing, not like now where a chunk of it goes to taxes. =(

Also, when figuring your expenses, along with postage, office supplies, etc, don't forget to include the insurance that's taken out of your commission. It may only be $2 a month, but it's deductible. That $24 may mean the difference between refund and payment.

 

[stacywhitlow]

I think there is a tax info guide on CC. That should help you some.

 

[ahammons]

Thanks everyone...

I've only been doing this since April, and it's really only been a hobby. I haven't don't a great job of keeping track of expenses and mileage... I only saved a couple receipts. Good to know about the insurance though.

But I will definitely keep track of every little thing next year!! lol

 

[RebelChef]

Definitely try to keep up with your mileage. That's where you'll usually get your best deduction. Because I live out in the country, everything I do pertaining to the business is at least 40 miles roundtrip. That's almost $20 deduction alone. It'll add up fast. Keep a little notebook in your car to write the odometer readings on or send yourself a text message with it. Even a little recorder would make it easy.

If you're not good at keeping up with filing, throw all your business receipts in a shoebox. I'm bad about keeping receipts. I have to clean my purse out once a week to make room because it's always full of receipts. lol Make it a habit to get one for everything to do with business.

You know you can deduct part of your mortgage/rent and utilities right? It's a pain but basically you have to figure up the square footage of the area you use as an office, then figure what percentage that is of your house square footage. Use that percentage of your utility bills and mortgage for your business. For instance, if your house is 1000 sq. ft and your office space is 200 sq. ft, that would be 20%. Figure 20% of your utilities and mortgage for the year and that's your deduction.

If you have a separate phone line for business, it's totally deductible. Internet can be. There are lots of legitimate deductions. Btw, Turbo Tax is a great program. lol

 

[sfdavis918]

You know you can deduct part of your mortgage/rent and utilities right? It's a pain but basically you have to figure up the square footage of the area you use as an office, then figure what percentage that is of your house square footage. Use that percentage of your utility bills and mortgage for your business. For instance, if your house is 1000 sq. ft and your office space is 200 sq. ft, that would be 20%. Figure 20% of your utilities and mortgage for the year and that's your deduction.

You can't do this anymore. You have to have a room that is 100% dedicated to your business. You can't have any personal things in there at all.

 

[ahammons]

I have to clean my purse out once a week to make room because it's always full of receipts. lol

Okay, you sound just like me!! lol

 

[lkprescott]

You can't do this anymore. You have to have a room that is 100% dedicated to your business. You can't have any personal things in there at all.

Yup... they've cracked down on that lately.

Tax Topics - Topic 509 Business Use of Home

Note the terms "regularly and exclusively"...

My DH and I both have offices in our basement but don't claim them because we also use those spaces for personal things like catching up on shows online and such.

 

[RebelChef]

You have to have a room that is 100% dedicated to your business.

Sorry, that's not true. I've verified it with the IRS (an actual human ) and the quote in bold is from Topic 587, which gives more details and examples than Topic 509.

The area used for business can be a room or other separately identifiable space. The space does not need to be marked off by a permanent partition.

Also, there is a flowchart and examples, to see if you qualify . Example 2 would relate to our business.

http://www.irs.gov/pub/irs-pdf/p587.pdf

 

[RebelChef]

Exactly, Lisa. To prove that you use it exclusively is the catch. lol I can claim that, but then when I'm taking a break from working and playing solitaire or reading personal emails, does that count? That's why it's such a pain to try to claim it. The funny thing is, if we had to carry inventory like some DS companies require, the rules would again be different.

I had a separate room solely as an office but because I only did taxes about 3 months out of a year, I never tried to claim it. That would have been a nightmare and just wasn't worth the few dollars I may or may not have gotten back on it. Some things are just too much hassle to deal with.

 

[Intrepid_Chef]

A few things you can claim that you might not have thought of:* Recipe ingredients (when you provided them for a show)
* Product samples and supplies (put it down as "consultant gift" if you buy things from your shows to demonstrate with.
• Cost of the kit (duh!)
• Mileage FROM YOUR HOUSE to the store where you bought your office supplies, recipe ingredients, etc., even if you stopped at that store only because it was on your way to work.
• Mileage from your house to your shows.I had another DS business for 3 years ... this would be my third year and I have business losses from that ... but I can't claim them as this is "hobby year." My goal is to start turning a profit with PC this year.

 

[shuttermonster]

I was told by my director that you can also deduct recipe ingredients that you "practice" with at home... was I misinformed?

 

[Deannasbiz]

I was told that also!

 

[jrstephens]

I was told by my director that you can also deduct recipe ingredients that you "practice" with at home... was I misinformed?

I do that. I have been told you can only deduct the recipe once, so, if you like it you cannot dedcut it each time you fix it over and over. Don't know if that is try or not, but I have stuck to that b/c I figure it makes sense and I do not want to lok like I am "over deducting" something.

You can also deduct any item your earn as "reinvesting" them in your business.

I do not deduct part of my home expenses b/c of the hassle of doing it and I have always been told that it will make you be audited sooner too.

I do my own taxes so unless I am SURE about something I do not do it. I would rather pay now than later.

 

[RebelChef]

so, if you like it you cannot dedcut it each time you fix it over and over.

We could always say we didn't like it the first 15 times we tried it. "Sorry, Mr IRS Agent, something just wasn't quite right all those tries." lol

 

[jasonmva]

Cash bonuses are considered income, too. unfortunately. The IRS just had to stick their nose into that one. lol I remember when a bonus was a bonus and you got the whole thing, not like now where a chunk of it goes to taxes. =(

Also, when figuring your expenses, along with postage, office supplies, etc, don't forget to include the insurance that's taken out of your commission. It may only be $2 a month, but it's deductible. That $24 may mean the difference between refund and payment.

For the insurance (and changeover kits as well), just remember that you have the record the income first before the deductions and then take the deductions.

In PP (not sure about PP3), you can enter all of your expenses. I do this regularly and then print each month and attach all receipts to it. Then I just keep it in a binder and it is all in one place.

 

[nilamji]

So, even if you don't receive a 1099, you need to claim the money you did earn? For example, I earned $500 (including incentives) last year. I did not receive a 1099. But, if I want to claim my deductions (consultant kit, host/door prizes, groceries), I need to tell the IRS what I did earn?

 

[luckystar]

Where do I find the 1099? Or since I just started beginning of October do I even have one??

 

[zookeeper614]

Also remember to deduct personal web site fee and internet service, cell phone and or regular phone used for your business.

 

[lkprescott]

So, even if you don't receive a 1099, you need to claim the money you did earn? For example, I earned $500 (including incentives) last year. I did not receive a 1099. But, if I want to claim my deductions (consultant kit, host/door prizes, groceries), I need to tell the IRS what I did earn?

Yes... just as you said. You'll need to fill out (or have your CPA fill out for you) a Schedule C to file with your 1040... there you'll fill out a breakdown of expenses and will come up with the difference between income and expenses which will then either be a loss or a gain and that number will get put on your 1040. BTW, any PC dollars you earned will also be there.

I wasn't sure if I'd get a 1099 or not. So in CC I went to the tax information part and clicked on 2007 1099 and it filled one out for me. My non-employee income was less than $600 but the $200 I earned in PC$ also is on there and does put me over $600 if I add them together. So if you earned some PC$ in 2007 you might find you have a 1099 as well.

 

[pampchefrhondab]

Anyone know what code we are to use for PC? It's like a type of business code. I think it is about 6 digits. Sorry if I'm not saying it correct. I started on my taxes last night.

I've always used the C-EZ, but this year I have a loss so I will have to complete the C. Is it a lot harder?

 

[HockeyLover]

I do that. I have been told you can only deduct the recipe once, so, if you like it you cannot dedcut it each time you fix it over and over. Don't know if that is try or not, but I have stuck to that b/c I figure it makes sense and I do not want to lok like I am "over deducting" something.

You can also deduct any item your earn as "reinvesting" them in your business.

I do not deduct part of my home expenses b/c of the hassle of doing it and I have always been told that it will make you be audited sooner too.

I do my own taxes so unless I am SURE about something I do not do it. I would rather pay now than later.

I was told that the IRS allows us to 'practice' each recipe at home twice, for training. Does anyone know for sure whether it's once or twice?

 

[nilamji]

Rhonda,I used turbotax and they walked me through filling out my Schedule C, so it was very easy.Did anyone answer your question about what code to use? I looked everywhere! Are we direct sellers?