5 Tips for Taxes in Direct Sales
These are the TOP 5 Tax Tips I wish I had known when I started my direct sales business!
FYI ~~I AM NOT A CPA~~ these are things I just wish I had known or done better when I first started out.
- TAXBOT~ Okay, Fine. I admit that I was told to use it from the get go. Hell, I signed up for the service the same night that I signed up to be a Jamberry consultant. AND that’s where I quit using it. BIG MISTAKE! Luckily for me, I had turned on the auto tracking for mileage and then just ignored the app. So when tax time came in 2016, out came the planner and I started fixing all the entries in my app. I had my mileage. I promised myself I’d do better in 2016 so when tax time came around I’d be in better shape. I was good to go with just the press of a button!
- EXCEL (or any spread sheet)~Track the gifts you give to your customers and anything extra you give as booking gifts. Track any items given as incentives/gifts to your team. You can claim up to $25 per tax year per person. These need to be business related gifts only! Track who, what, when, why, and how much! If you had to donate product for a vendor event you participated in, you can claim up to $25.
- BUSINESS EXPENSES~ Track those business expenses! I’m not saying you need to be a professional bookkeeper or a CPA but you need to make sure you are tracking your expenses. Again, I underutilized Taxbot’s capabilities. I failed to input anything in to the app. You can take pictures of your receipts for goods you bought and attach them to your entries in Taxbot. You can claim training, web service fees, advertising, samples, and paper goods. The list of items you could potentially claim is limitless. I’ll have to do a separate blog post on this topic someday!
- FILE FOLIO~ You know the one I’m talking about. It’s the plastic paper sized accordion file with a clasp on the front. ORGANIZE your receipts! Even if you use Taxbot and take pictures, I am a believer of paper trail. I also know myself well enough to know I probably FAILED to enter everything I could. So I double check everything with a paper receipt. I also keep copies of any vendor contracts in this file. Yup, you can claim those fees.
- CPA~ Get one. A good CPA can guide you in everything you need to track from what you can and can’t claim to should I or shouldn’t I claim my inventory. I would suggest making sure that the CPA you find is well versed in doing taxes for those involved in direct sales. Direct sales are a little different than regular small business when it comes to taxes. Ask some of your contacts in the industry who they use.