Tax Deductions for Network Marketers

The 2016 tax deadline* is just days away! April 18th will be here in no time!

Are you ready? For some small business owners it’s a big nope! But I got you! No worries.

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Wearing many hats require me to know about as many tax deductions as possible. If you are in any MLM, Self Employed, you know exactly what I’m talking about.

 

Use this tax information as a Deduction Organizational Guide


Home Business Expenses

  Set aside a space in your home that is 100% business use.  Never used for anything else, and regularly used for business.  This is where you keep your business records, your business computer or laptop, make your sales calls from and meet clients.  The tax term is regular and exclusive business use.  If you do this, you deduct a percentage of the household expenses – rent, interest, taxes, utilities, insurance, repairs, etc, based on the square footage of the office ratioed to the home square footage.  Expenses directly related to the office, such as a dedicated phone line; do not have to be ratioed.  You can also take a small depreciation deduction for the home losing value.  -K.P. KP Tax Servive kptax.webs.com

  • Business cards
  • Brochures
  • flyers
  • stickers
  • cd’s
  • copying
  • printing
  • letterhead
  • advertising- Newspaper, magazine, radio, TV, internet
  • business checking account

Office Supplies

  • Envelopes
  • Postage
  • shipping
  • printer paper
  • printer ink
  • pencils , pens, markers, highlighters
  • notebooks
  • post-it notes

“The easiest mileage log is a notebook where you right the date, the trip purpose and the miles driven. ” K.P. -KPTax Service, kptax.webs.com Charlotte NC

Office Equipment

  • Computers and repairs
  • printers
  • fax
  • copy machine
  • answering machine
  • furniture
  • office space
  • file cabinets

Communication Expenses

  • Cell phone, phone bills
  • PDA
  • camera
  • video recorder
  • voice recorder

Travel Expenses

Go on trips that are going to increase your money-making potential.  Stay away from any others.  For legitimate travel, you get airfare, rental car, tips, taxis, laundry, internet and phone, as well as 50% of meals and any other reasonable and necessary expenses. K.P KP Tax Service  kptax.webs.com

  • Mileage- trains, subways, bus
  • toll , parking fees
  • airfare
  • lodging
  • meals
  • conferences
  • conventions
  • seminars
  • entertainment
  • Business gifts

Internet Expenses

  • Website hosting
  • domain names
  • web design
  • blogging expenses
  • podcasting – ipod, software
  • accounting software
  • tax software
  • internet service
  • classes
  • webinars
  • marketing

Business Related Education

  • literature- books, journals
  • magazine subscriptions
  • educational cd’s and dvd’s

Trade Show Expenses

  • booth fee
  • travel
  • meals

There are so many more to add to this list. I intended to give you a mental rolling start. . I’m a tax expert. Contact KPTax.webs.Com  to discuss your particular tax situation. Also get  more guidance. Please buy my book. It’s a easy read and loaded with tips for Direct Sales professionals. Message me —> QCSupermominfo@GMail.com

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Friday Four: Baby Sitter Money Tips

 

One of my  daughters is a private baby sitter.  She is CPR certified and has taken many continued education classes so she may remain in high demand. She’s a natural! As a big sister to five younger siblings, she’s able to baby sit for moms groups, business meetings, private parties, and now she now assistant other doulas while at the hospital serving laboring mothers.

tbsHaving a quality, trusted, babysitter is very rare. The process of finding one is a headache alone. But when you find one, many wonder, how will they pay for her.

And guess what? It’s only getting higher! While I don’t agree with that, I do believe that a great baby sitter is worth a good penny.

It costs to learn new skills,training, certifications, transportation to and from service locations and it’s also a symbol of  proper expectation.

My daughter charges up to  $12.00.per hour.  Her clients LOVE her. She brings toys, books, loads of energy , experience in autistic, multiples, and newborns. She also hires other teens like her to help as needed. Most people like her prices, everyone don’t. It’s usually the ones that want her, but can’t afford the rate. The comfort and well being of your child will always be your number one priority, but quality childcare doesn’t have to cost an arm and a leg. Follow these tips and find an option that works for your family.

  1. Share Your Sitter- If you are planing on hanging out with your friends, why not share the baby sitting cost. It does a couple of things. It gives the kids an instant play date, and saves each parent money.
  2. Barter- My daughter loves getting her nails done, nice shoes, and great food. If you have any of these things, ask to trade instead of using money. Teens like my daughter will accept. Just ask  first to verify it’s acceptable. With both the teen sitter  and her parents.

According to UrbanSitter’s 2014 Childcare Rate Survey of nine large metro areas, the average babysitter wage paid in New York City is$15.34 per hour while in Denver it’s $10.84 per hour

3. Join a progressive mom group. – Queen City Stay At Home Moms offers discount child

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care rates to their premium members.

4.Take The Credit.     If you use registered child care or pay a babysitter to care for your children, you can deduct at least a portion of your expenses for income tax purposes.

    • Expenses are deductible for the care of dependent children, under the age of 16.
    • Babysitters may be related to you (but not a parent to your child) and must be over 17 years of age.
    • The child care deduction is limited to two-thirds of earned income, or $4,000 a year per child aged seven to 16; $7,000 a year per child under seven years; and up to $10,000 a year for each disabled child.
    • For details of child care options in your area, contact your province’s child care licensing agency.

Bonus- Sign up for a Flexible Spending Account
If your employer offers this option, use your Flexible Spending Account (FSA) to set aside money for child care. You can include up to $5,000 before taxes

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In closing , be strategic! At The Big Sister, most families look for care during the summer. The more affordable and experienced caregivers get grabbed early and day care slots fill up quickly. Start your search soon and don’t wait until the last minute.Well, there you have it! You have no reason to avoid date night away from the house, a business meeting at home ,or a fun Moms Night Out! You can afford it!

PLEASE READ- From Care.Com- Great Area- Fee based Information! 

Taxes Smaxes! My Tips for SBO

It’s coming. Are you ready? If you are like me and own a small business, this time of the year can be a headache if not organized! Yes, you have until the 15th of April, but why wait? Here’s some tips to get you on the road to a low stress tax filing season!  The goal  is to pay the lowest tax you are legally required to pay.  This will help! This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business adviser or tax adviser with respect to matters referenced in this post.
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Small Business Owner Check List

✔ A copy of the last three year’s Federal and State tax return

✔ Articles of Incorporation, Partnership Agreement, Operating Agreement, etc.

✔ Copy of current period balance sheet, income statement, trial balance and general ledger

✔ Prior year financial statements

✔ List of all business owners including: ✔ Name, ✔ social security numbers, ✔ address, ✔ percent of ownership, ✔ date ownership acquired and ✔ detail of distributions

✔ Schedule of owner fringe benefits received

✔ Schedule of loans to/from owners including loan agreements

✔ Details of any related party transactions

✔ Copies of all payroll forms and 1099 forms for the year

✔ Amounts of any estimated tax payments

✔ Listing of interest and dividend income

✔ Vehicle information and use, including vehicle leases

✔ Information on any employee benefit plans including retirement plans, health insurance, etc.

✔ Details of meals and entertainment expense

✔ Any Internal Revenue Service and Department of Revenue correspondence received during the year

✔ List of any activities in other states

✔ Details of fixed assets and depreciation schedules

tax time

Schedule C, Self-employed Checklist

Income 

List of bank deposits 

All 1099s 

Other income (interest etc.) Cost of good sold 

Beginning inventory 

Purchases of goods sold 

Materials & supplies 

Ending inventory Auto expense 

Lease payments 

Auto insurance 

Interest of auto loan 

Repairs & maintenance 

Total miles driven 

Business miles driven 

Total gas purchases 

Date car purchased 

Model and make of auto Salaries & wages 

Total gross wages paid 

Company paid FICA 

Federal unemployment paid 

State unemployment paid 

Worker’s compensation paid Expenses 

Advertising 

Commissions paid 

Liability insurance 

Interest paid 

Legal & professional fees paid 

Office supplies 

Rent paid 

Dues & subscriptions 

Travel expense 

Meals & entertainment 

Utilities 

Bank charges 

List of assets (cost & date acquired) 

Health insurance premiums Office in home 

Total square feet of home 

Total square feet of office 

Mortgage interest 

Real estate taxes 

Utilities paid 

Home repairs 

Home insurance [1040 General; Schedule E, Rental property checklist

Ready to do your taxes? Get a 50% of code. Request your Turbo Tax code here!

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Wednesday Wow! Hey WFHM, that babysitter is deductible!

“I’m a work from home mom and I hire a babysitter for meetings at home and away.I want to know if those expenses are deductible.”

QC Tracy and qcsm

Short ANSWER: YES! Keep your receipts and file them for ChildCare  at tax time. In fact, you may qualify for $3,000 in tax credits for one dependent, and a maximum of $6,000 for two dependents or more.

I have been asked this numerous times during tax season and by mothers that have decided to work from home. So I figured if I placed it here, moms could verify it against what the IRS says, save me time from repeating myself and I bring more traffic to my humble blog.  (Yes, who doesn’t love them THREE’fers)

Okay, so how to get the credit: 

The credit has a number of technical rules. For instance, in cases involving divorce, the custodial parent can take the credit, while noncustodial parents can’t, even if they would otherwise qualify to treat the child as a dependent.

Requirements 

In Charlotte and looking for a certified sitter? Contact The Big Sister! CLICK HERE!

In Charlotte and looking for a certified sitter? Contact The Big Sister! CLICK HERE!

 

To claim the child and dependent care credit, you must meet these requirements:

  • You and your spouse must usually file as married filing jointly. (See Filing Exceptions below.)
  • You must provide the care so you (and your spouse, if married) can work or look for work.
  • You must have some earned income. If you’re married and living together, both you and your spouse must have earned income. However, one spouse might be disabled or a full-time student at least five months of the year.

Even if you’re not married filing jointly, you and your spouse might be able to claim the credit. You must meet both of these requirements:

  • You paid more than half the cost of maintaining a household for the year. Both you and the qualifying person must have used the home as your main residence for more than half the tax year.
  • Your spouse wasn’t a member of the household during the last six months of the tax year.

You must provide the name, address and Taxpayer Identification Number (TIN) of the person who provided the care. The taxpayer ID number is either a Social Security number (SSN) or an Employer Identification Number (EIN). Ask your care provider for the number.- KP Tax Service

Qualifying persons

To claim a credit for qualified expenses, you must provide care for one or more qualifying persons. (See Qualified Expenses below.) Qualifying persons include:

  • Dependent who’s a qualifying child and under age 13 when you provide the care. Usually, you must be able to claim the child as a dependent to receive a credit. However, an exception applies for children of divorced or separated parents. In those situations, the child is the qualifying child of the custodial parent for purposes of this credit. This applies even if the noncustodial parent claims the child as a dependent.
  • Spouse or dependent of any age who’s both of these:
    • Physically or mentally incapable of self-care
    • Has the same main home as you do when you provide the care

Qualified expenses Child-Care-Inforaphic

 Don’t forget those expenses that cover household services, such as housekeeping, while you work or search for work, also count toward the credit if the services were necessary in part for child care.-KP Tax Service

Qualified child- or dependent-care expenses are those you incur while you work or look for work. The main purpose of the expenses must be for the well-being and protection of a qualifying person.

Qualified expenses include:

  • Expenses for care provided outside the home. This applies if the qualifying person regularly spends at least eight hours each day in your home.

If the qualifying person receives the care in a dependent-care center, the center must comply with all relevant state and local laws. A dependent-care center is one that cares for more than six people for a fee.

  • Expenses for in-home care. This includes expenses for:
    • Cooking
    • Light housework related to the qualifying individual’s care
    • The care itself
  • Gross wages paid for qualified services, plus your portion of:
    • Social Security
    • Medicare
    • Federal unemployment taxes
    • Other payroll taxes paid on the wages
    • Meals and lodging for the employee providing the services

These expenses don’t qualify for the child and dependent care credit:

  • Transportation costs to and from the childcare facility
  • Overnight camp expenses
  • Expenses for the education of a child in kindergarten or higher
  • Expenses for chauffeur or gardening services

The cost of before- or after-school programs might qualify if the program is for the care of the child. Education costs below kindergarten qualify if you can’t separate those costs from the cost of care. This includes nursery school.

  child careCalculating the credit

The credit is equal to 20%-35% of qualified expenses. The percentage you can deduct depends on your adjusted gross income (AGI). The maximum amount of qualified expenses you’re allowed to calculate the credit is:

  • $3,000 for one qualifying person
  • $6,000 for two or more qualifying persons

Complete Form 2441: Child and Dependent Care Expenses and attach it to your Form 1040 to claim the credit. For more details,  check out KP Tax Service. It’s mom owned and ran. With over a decade of experience.

FOR BABYSITTER/NANNYS HOUSEKEEPERS I’ll share more details on how to file your taxes and keep your business legal next week. In the mean time, here’s HOW to file your taxes-> READ THIS- HERE

www.bankrate.com/finance/taxes/avoi…

www.4nannytaxes.com/faq/

Hope this helps!

Kelle, QC Supermom

Friday Four: Selecting a Tax Preparer

Recently I hosted a Turbo Tax Party. I was able to offer discount codes, tax tips , a spiffy -information infused folder and a healthy snack. It was a pretty nice HouseParty*.  Because we had friends and family out of town that wanted the information, we did a Periscope and created an online party on FaceBook. (You can still join in for great tips and tax jokes) Whether you use a family friend/non certified or a CPA, Enrolled agent, etc., you should know what to look for.

EA is a tax professional licensed by the IRS through a special enrollment exam or after working for the IRS for five years.They’re required to take continuing education courses in taxes every three years, and, generally speaking, may charge less than CPAs.

There are several good signs for a good tax preparer, but not many for a bad one. For example, Good tax preparers will ask for all your W-2, 1099 and 1098 forms as well as other records and receipts to verify income, expenses and credits.  Preparers who are willing to e-file returns using paystubs in place of W-2s are in direct violation of IRS rules and regulations. Did you know that? Well here’s 4 more tips to use to keep you from being audited.

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  1. Ask The Big Question                                                                                                                Ask for referrals. Easy one right, but you’d be surprise at the number of people that don’t do that. Some of the biggest brands in the industry have shaky branch offices and preparers.  So don’t let the name and office space fool you.

Note that you don’t have to go to a tax preparer’s office to do your return. Tax return preparation can be handled completely online by email. There are no laws preventing you from using an accountant online. Thus, you can use a preparer in another city or even another state.

2. They Do NOT have to be licensed.                                                                                                           “The court ruled that Congress never gave the IRS the authority to license tax preparers, and the IRS can’t give itself that power.”Only a few states – such as California, Oregon, Maryland and New York – have licensing or registration requirements for paid tax preparers. In all other states, practically anyone can prepare your federal tax return and charge a fee. See theRegistered Tax Return Preparers (RTRP) program required preparers to obtain a Preparer Tax Identification Number (PTIN), pass a competency test, pay an annual application fee, and complete fifteen hours of continuing education annually. Not everyone wants or must do that. It doesn’t automatically rule them as incompetent, scammers or, out right abusers.

3.Client Security

Unfortunately, the tax preparer industry has not remained immune from the ever-increasing problem of security breaches.  Never hesitate to ask a preparer how they safeguard client confidentiality in the form of physical and electronic security of their clients’ information and records.  If the answer is not to your satisfaction then walk away.
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4.PTINS and E-filing

A paid preparer must have a Preparer Tax Identification Number (PTIN) and if they prepare and file more than 10 returns for clients they must file electronically.  The client copy of the tax return should show the preparer’s name and PTIN in the signature area of page two of the Form 1040.  Never agree to do business with a tax preparer who refuses to provide their clients with copies of their tax returns.

audit w2

Look for someone with at least seven years’ experience. You want someone who’s handled a variety of tax situations, in both good and bad economic times.

Often, the best way to find a tax pro is to get referrals from friends or business associates. If this doesn’t work, there are a number of professional organizations that have online databases of tax preparers.

 

Oh, and please don’t overlook this IRS page and this one.too!

The reality is, taxes can be hard, and it’s getting harder. The Tax Code is becoming increasingly complicated. And tax preparers make it easier to navigate. Tax time alone can be a stressful. That’s why many taxpayers hire someone to do their taxes for them. It’s important to choose the right preparer, otherwise you may find yourself in the precise legal trouble you were trying to avoid in the first place!

Keep It Right- Keep It Tight!

Jabela