Year-End Taxes or Quarterly Taxes?

Click For Summary

Discussion Overview

This thread explores various perspectives on tax obligations for Pampered Chef consultants, particularly regarding year-end versus quarterly tax payments. Participants share their personal experiences and insights about filing taxes, claiming deductions, and managing business expenses.

Discussion Character

  • Anecdotal
  • Opinion-based
  • Exploratory

Main Points Raised

  • One participant, identifying as a consultant, mentions relying on their accountant father for tax guidance and expresses uncertainty about quarterly tax payments.
  • Another participant shares their experience of never paying quarterly taxes and not facing fines, suggesting that Pampered Chef consultants may not be subject to the same regulations as traditional small businesses.
  • One participant reflects on their previous experience with Avon, indicating they filed taxes at year-end after receiving a W2 from their full-time job.
  • Another participant notes that independent contractors must report earnings regardless of receiving a 1099 and that quarterly payments are not mandatory.
  • One participant clarifies that sales tax is handled by Pampered Chef, while income from commissions is taxable.
  • Several participants discuss the implications of claiming losses and the potential classification of a business as a hobby after consecutive years of losses.
  • One participant shares their method of tracking mileage for business purposes and suggests that all travel related to business can be counted.
  • Another participant mentions using a mileage book to keep track of business-related travel.
  • Some participants discuss the deductibility of various expenses, including internet and home office costs, with differing views on how to claim these deductions.

Areas of Agreement / Disagreement

Views differ on the necessity of quarterly tax payments and the implications of claiming losses. No clear consensus emerges regarding the specifics of tax obligations and deductions.

Contextual Notes

Participants share personal experiences and insights based on their individual circumstances as Pampered Chef consultants, with varying levels of familiarity with tax regulations.

Who May Find This Useful

Consultants seeking to understand tax obligations and experiences related to filing taxes for their Pampered Chef business may find this discussion relevant.

JenniK
JenniK
Messages
60
I just started selling PC this year, so I have no idea what to do about taxes. And I've never been good with what to do aroudn tax time. My dad is an accountant so I rely on him.

It wasn't until last month that I realized I might need to pay some for taxes, so I've put some money aside for that. However, I was talking to a friend the other day that owns a small business and she said that if I wasn't sending in quarterly taxes, that I would have to pay a large fine? Is this true?? :eek: I just assumed that if I kept my receipts and had some money aside, I could take care of all the taxes at the end of the year.

Thanks!
 
I've never paid quarterly taxes and I've never had fines. I'm not a tax expert in any way, shape or form, but I do believe we don't fall under all of the same tax regulations a regular small business would be subjected to. I'd definitely check with an accountant though, and if your dad does taxes in his accounting business, he'd be fine. But if he doesn't regularly deal with sole proprietorship type tax returns, you might want to check with someone who does.
 
When I sold Avon, I filed with my year end taxes after I got my W2 from my full time job so I plan on doing the same with PC
 
You only do it at the end of the year. I wonder if the taxes she sends in is the sales tax? Not sure, not an expert! If you have enough write offs you may not have to pay anything.
 
As independent contractors (that is what we are), we are required to claim our earnings whether or not we receive a 1099 on our tax return. We are not required to pay taxes quarterly to the government. Now, your state income tax may be different.
 
Just to clarify - we don't pay the sales tax, TPC does this for each state.

We DO pay taxes on our income from commissions. You can do this on a 1040 return, and claim all your expenses at the same time (hopefully, if you do everything right - including adding in your groceries and mileage, etc, you'll actually have a 'loss' at the end of the year).
 
I thought you don't want to have a "loss" at the end of every year..my brother is a CPA here in PA..and he told me that if you have a loss for more than I think 3 years..that it is considered a hobby. I might have misunderstood your comment Sarah I just wanted to clarify
 
A small business with employees would be required to pay State/Federal Withholding, Unemployment, etc....so they would be doing Quarterly Taxes. She may be doing that. (I helped set up this stuff for a business a few years back - but I'm not a tax person...just was more intelligent about it than the business owner!)As sole proprietors with no employees or any of those tax requirements on our earnings- other than regular Income Tax....I've never had to file anything other than the special forms at the Year-end. I know there is/was at least one lady on here that is an accountant...she answers alot of questions I've seen in the past- so maybe she'll see your post and give you a more "official" answer.
 
  • Thread starter
  • #9
Thank you all so much! As soon as my friend had told me that I did panic. I was wondering why I didnt' see anything about it on here! So, phew! I've been keeping receipts (or almost all of them - I wasn't as good about when I first started as I am now), but I haven't been keeping track of mileage. I was under the impression (and not sure why), that if a show was under 20 miles from your residence you couldn't claim it. I only have one show that would fit in to that category. Is that true or not?
 
Mileage is mileage- if you drove anywhere for your business, grocery store, post office, a show....you can count it.If you didn't keep track, (I'm terrible at it too), I use my calendar and just know that I went to a certain meeting, or show, etc. and then can use Mapquest or something to calculate the mileage from Point A to Point B. It's better than nothing!
 
I am so bad with Mileage..so..at the end of the year..I always mapquest all of my shows..but..then again..it is not that bad..I don't do too many shows..I WOULD NOT want to do that if I had a bunch of shows..
 
you can claim a loss for up to $1500 for the first 3 years of your home business. After that you have to claim earnings I believe in order for it to not be considered a hobby
 
For mileage I bought a mileage book at Staples (one year off ebay) and keep it in my car at all times. If you are just recording your shows, you are missing out on a lot of mileage!
 
I usually input everything (expenses) as I go in P3. I use the report I get from PC and give that to my accountant. Until July of this year, I have only done PC part time--some years I would break even; some years come out at a "loss", but I haven't really ever owed because of it.

Also, any awards you get from PC you can write off when you use them for business.
 
How do you claim your mileage? Do you use a rate (i.e per mile to come up with a dollar figure)?
 
cheflorraine said:
How do you claim your mileage? Do you use a rate (i.e per mile to come up with a dollar figure)?
Click to expand...

Yes- per the IRS. You can enter the mileage amount (actual or estimated miles driven), or you can enter your odometer reading- if you track it.

http://www.irs.gov/formspubs/article/0,,id=178004,00.html (link takes you to the IRS webpage)
 
This whole tax thing has got me thinking so if we come out as a "loss" then are we really making money?
 
The other part of Quarterly Taxes-
If you are a contract employee (1099) you can set it up to pay quarterly to be applied to that year, ie pay while you go. That way IF you were to owe a bunch of money at the end of the year the brunt of it would already be paid. Does that make sense?

My ex was a DJ and that is how his was set up after one year of oweing a couple $1000. But if you either have another job or don't generate that much income from PC you should be fine.
 
this is the response I got from a friend who does taxes

You can claim whatever loss your business generates, but after 3 years of consecutive losses, the IRS wants you to be able to prove that it is a business NOT a hobby.
Things like, changing your advertising technique, having a business plan, etc are acceptable.
Click to expand...
 
littlemaisyPC said:
This whole tax thing has got me thinking so if we come out as a "loss" then are we really making money?
Click to expand...

Alot of the things you can write off are things you were paying for anyway - writing off mileage to the store or bank when you do personal and PC stuff, writing of household bills if you claim a home office, writing of a cell phone bill, groceries for recipe tasting (which feeds your family). Stuff like that you are paying for anyway but are now considered a business expense.
 
Can we write off internet as well since we need it to submit orders??
 
I would say you can only write off your internet if you only use it for submitting shows, since I am assuming all of us use it for personal use also I wouldn't write it off.
 
Jen1409 said:
Can we write off internet as well since we need it to submit orders??
Click to expand...

I do but I also claim a home office.
 
wadesgirl said:
I do but I also claim a home office.
Click to expand...

I do the same. This year I have more then doubled my business and do you know this is the WORST year I have had at record keeping??
I am going to be in a panic at the end of the year!

Question, can you figure out mileage after you have closed a show in P3? And what are we now claiming for mileage now?
 
I posted it earlier in this thread with a link to the IRS...but it's $0.55 for 2009. Last year, it had two rates depending on the months.
And yes- you can enter mileage after closing a show. I've never entered my expenses in conjunction with a show. I SHOULD! But there are a LOT of things I SHOULD do. :)
 
Another tax related question - do you do separate taxes for your PC business or just add it to your family taxes?? Will I need to go to H&R Block or can I do it myself using TurboTax?
Thanks!
 
What can you claim?Check out this helpful document I received from my director. :) It's been very helpful for me to wrap my head around the whole "taxes" part of this business. ;)
 

Attachments

Dottie, I do my business in my personal taxes since I operate as a sole proprietorship. I use Turbo Tax to do my taxes.
 

Frequently Asked Questions

What are year-end taxes for direct sales consultants?

Year-end taxes for direct sales consultants refer to the income tax obligations that must be reported at the end of the tax year. As a consultant, you are considered self-employed, which means you need to report all income earned from sales and any commissions received. You will typically receive a Form 1099-MISC if you earn over a certain threshold, which will help you in preparing your tax return.

What are quarterly taxes and who needs to pay them?

Quarterly taxes are estimated tax payments that self-employed individuals, including direct sales consultants, must make four times a year. If you expect to owe $1,000 or more in taxes for the year, you are required to make these payments to avoid penalties. These payments cover both income tax and self-employment tax.

How do I calculate my quarterly tax payments?

To calculate your quarterly tax payments, estimate your total income for the year and determine your expected tax liability. You can use the IRS Form 1040-ES to help calculate your estimated taxes. Divide your total estimated tax liability by four to find out how much you should pay each quarter.

What happens if I miss a quarterly tax payment?

If you miss a quarterly tax payment, you may incur penalties and interest on the amount owed. The IRS may charge a penalty for underpayment of estimated taxes, which can add up over time. It's important to pay as much as you can to minimize penalties and to make the missed payment as soon as possible.

Can I deduct expenses related to my direct sales business when filing taxes?

Yes, as a direct sales consultant, you can deduct various business-related expenses when filing your taxes. These may include costs for inventory, marketing materials, home office expenses, travel, and training. Keeping accurate records of all expenses is crucial for maximizing your deductions and minimizing your taxable income.

You must log in or register to reply here.

Similar Pampered Chef Threads

How Do I Know if I Need to Pay Quarterly Taxes?
  • pc_momof3
    • Pampered Chef Finances
Replies
4
Views
2K
AnaCash
Filing Taxes in Canada: Tips for Commission-Earning Professionals
  • cheflorraine
    • Pampered Chef Finances
Replies
2
Views
2K
Admin Greg
Questions About Doing Business Taxes for the First Time
  • cookingwithdot
    • Pampered Chef Finances
Replies
11
Views
3K
mrshamel3808
Tips for Managing Taxes as a College Student: Pampered Chef Income
  • ponvn591
    • Pampered Chef Finances
Replies
7
Views
2K
doughmama
Do You Have to Pay Taxes on Your Side Gig? Insights from a PC Consultant
  • Cookin Kristen
    • Pampered Chef Finances
Replies
6
Views
2K
Cookin Kristen
How Much Should I Set Aside for Taxes on My Business Profit?
  • NooraK
    • Pampered Chef Finances
Replies
4
Views
2K
AnaCash
Maximizing Tax Deductions: Lunch with In-Laws and Business Expenses Explained
  • sarahsworld2000
    • Pampered Chef Finances
Replies
5
Views
3K
slmoulton8
Staying On Top of Expenses: My New Year's Resolution
  • Amanda_RI
    • Pampered Chef Finances
Replies
22
Views
4K
ShellBeach
Can I print my expenses from P3 and deduct them on my taxes with PC?
  • NewtoMom
    • Pampered Chef Finances
Replies
2
Views
2K
Admin Greg
How Do I File Taxes for My PC Sales?
  • elizabethfox
    • Pampered Chef Finances
Replies
4
Views
3K
elizabethfox
Back
Top