NOTE: tax laws are changing all the time. I am not an accountant & recommend you consult a tax preparer or accountant for the latest in tax laws.
The key to easy tax preparation is to keep good records from the beginning. (See below for an Excel program you can use.) Set aside one day a month to put your taxes in order for the previous month. That way when tax time comes, you’ll be all ready! Here are some things to keep track of each month:
- Print out each month’s Activity Statements — don’t forget to print your downline report if you have one.
- Keep track of your Mileage – I prefer an App over a Mileage Book but whichever you use, make sure you use it! Keep a book in your car, etc. and keep the odometer readings for your round trip mileage for SU! related car trips. An app I recommend is MileIQ
- Keep Receipts! Postage(swaps, customers, newsletters, etc.); Copies; Food for events; non-SU! items used for events; SU! events – air transportation, parking, food, hotel, etc.) One thing I always do is take a photo of a receipt with my phone, that way I have a backup if I ever lose the actual receipt.
- Credit Card Processing Statements (if you process credit card payments separate from SU!) – fees are deductible. This is especially important if you’re using PayPal! (Make sure you’re tracking the income as well.
- Business Training – other demonstrator’s stamp camps, SU! events, job coaching – all of these are business expenses.
- Class Fees you collect – you do need to report these on your taxes!
- Donations (if you ordered and paid for merchandise or made a cash donation)
- Downline/Customer Incentives and gifts
- Subscription fees: on-line courses, stamping magazines, your DBWS, etc.
- Computer programs for business, i.e., turbo tax, virus protection, etc.
- Bank Fees
Here’s a quick & easy Excel program to help you keep track of your expenses — make sure you keep a back up of this file off of your computer!
You have more expenses than you probably realize – make sure you’re writing off everything you can!
The principal business code for Direct Sales is 454390. This goes on Line B of your Schedule C form.
Resources to look at from the IRS webpage:
- Is it a Business or a Hobby?
- Is Your Hobby a For-Profit Endeavor?
- Business Expenses:
IRS Publication 535, Business Expenses