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| I didn't think of that....darn it.....too late now, got my refund today! LOL |
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thats exactly what I did. I added them back in under my expense categories in the months that I earned them. For instance tool turn about tote when under the "supply" category. Charms and bracelets went under advertising expenses. Yes he is a real accountant that offers bookkeeping and tax planning to individuals and businesses. Wierd. Oh well I'll see what he says about it. |
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I use microsoft excel to put my expenses on and use the total from my 1099 as reivested. My accountant has never questioned it. He has been in business for a long time. I trust him very much. The key to this business is to make money......but not on paper. I am reinvesting my charms and bracelet too. You can reivest just about everything, some people try to reinvest the trip but the accountant frowned on that. |
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Ugh. Talking about this topic tonight resulted in a big fight with DH. He also owns his own biz and thinks he owns everything.  He started talking about categorizing my product bonuses as assets, then depreciating them, etc. I told him NO, they are expenses, and that he is not an accountant. Grr. And that MY biz is nothing like HIS biz so butt out! It all started when talking about needing to get our final tax stuff together (mine is not as organized as I would like) and get it all finished. |
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My accountant did call me Friday night once he had worked most of our papers to let us know where we were (I was very worried this year). He told me that he had consulted with another accountant on the reinvested deal and decided that he just wasnt comfortable doing it. Mostly b/c I did not incur any expense to get them, they were gifts and he didnt feel writing them off as an expense was legitimate. He understood where I was going with it and that there was reason behind what I was trying to do, but he was not comfortable with putting it down as an expense since I didnt pay anything for it. |
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| Unbelievable, is it too late to fire him...... |
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Kris, I think you need a new accountant! Assuming he has your 1099 from PC, the GIFT is clearly not a gift - the value of it is included on your 1099!!! He has to include it in your INCOME, so it is just as valid to include it as an expense as if you had written a check for it!! It doesn't sound to me as if your guy has a clue about what he's doing - no way would I let him do my taxes!! (And I AM an accountant, not a tax accountant but an accounting manager for a large software company with an accounting degree - no way am I an expert but I DO know how to read a 1099 and always do my own taxes!!) Marilyn |
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So how are you guys entering it then? Just listing it down as an expense? Or are you putting it somewhere else? We talked about it and I told him I knew many others did this and he said if he knew how they were entering it and such then it might be helpful to make him see it a different way. I am not too terribly worried about it b/c I normally do my own taxes. This year we just had a lot of different things factoring in b/c of the move and I didnt want to mess up so I went to an accountant. I had to file 2 state returns for myself from 2 different states, my husband was deployed and a significant portion of our income was nontaxable. The biggie was then when he returned in Sept and they were supposed to start taking taxes out of his paycheck again they kept screwing it up and didnt. So basically we only paid taxes on his income for 4 months out of the year when we should have paid taxes for 8 months...I was very concerned we'd owe a load of money and wanted to go to someone who could crunch the numbers to save me as much as possible. As it stands right now we actually dont owe anything which makes me VERY happy...I will go back to doing them myself again next year and doing it my way. |
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I would have to say this accountant works for the government NOT the tax payer! Ok I earned the Tool turn about bag.... I earned it was NOT a gift by no means, Doris didn't say hey heres a gift for a job well done. I use this for every show, thats how I reinvest it. Its not on our 1099 as a gift its misc income. |
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Our tax guy wouldn't consider writing off any of my PC stuff last year. He said if I use it at home then he couldn't wirte it off as a business expense. He doesn't like dealing with Direct-selling companies at all. He said I couldn't write off the groceries for testing new recipes nor the food I paid for when I gave a "free" show for the host. He said these type expenses sent up a red flag to the IRS and we were more likely to be audited. That doesn't really bother me. He said something about if you don't make money for three years then it is considered a hobby and not a legitimate business. There was also another matter involving real estate which I think he lead us astray. I want to find a new tax acct. this year but my DH doesn't. I've got all our paper work together but haven't found a new person yet. Not ready to fight that battle just yet. Sharon |
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Kris, sorry to hear about all this craziness! Geesh! We are also military. My hubby took a tax class so he could help out his soldiers while he was in Korea and Iraq. We were worried about where to file state taxes this year because we lived in 2 states. He was told that we only have to file taxes in the state of residency on his record. For us that is Kansas even though we are now living in Colorado. They do this because military move around so often. In the course of a year you could have moved so many times that if you filed individually in each state you could make less in the time you were in that state that you could get around paying any taxes. For example...in Kansas if you make less than $600 then you don't need to file a return. So if we moved to different states and made less than the $600 minimum to file we wouldn't have to file. For most that never happens, but for some it very well could. So the military puts your residency as one state...likely the state you joined the military in and you pay taxes to that state only. We live on post so that may make a difference in how that works. I asked if I had to still file two state taxes...he said the residency applies to the entire family not just him. That is ridiculous about the deployment tax mess up. Too bad they don't have my attitude. The government screwed it up not a company...they just screwed themselves! lol! Michelle |
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Ok, I was a full charge bookkeeper for 5 year, I am degreed in Business Admin with an emphasis in Accounting. I had never heard of the reinvesting thing until I started with PC, but it makes complete sense, but now on the subject of setting it up as a fixed assest and depreciating, NO WAY. If is less that $250 you can immediately take it as an expense, that I do know for sure. I expensed enough stuff for people over 5 years that I do know that for sure!! HTH
Michele |
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Michelle, Shelby doesnt have to pay state taxes b/c he is a FL resident and active duty. I am also a FL resident, but since I am not active duty and I am employed in a state that charges state income tax I have to pay. So I had to do a state return for both MS and AZ b/c I earned income in both places. I so wish we could tell the govt they screwed themselves! Believe me it is SO irritating that you cant just go in there and rip someone a new one over this. I mean if any other place had screwed up so badly and then had the nerve to take 6 months to fix it the better business bureau and an attorney would be involved...but since it's the military you have to be all nice and smiley and trust that the next moron you talk to actually fixes the problem. You cant exactly go scream at the base commander that his finance office troops are complete idiots. lol. |
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Sharon, You definitely need to find a new accountant!! OMG....if you supply the food for the host or for testing it is a business expense!! I write off the recipes I make for our cluster meetings, too. His attitude towards direct sales is too bad. Maybe he had a bad experience so now he takes it out on his clients? In any case, you should replace him. My accountant is probably the most honest person you could meet. She is super conservative with write-offs, but she has never questioned my PC expenses. As for reinvesting....using the items in your home should be considered product testing. Obviously you can't write off gifts to family and friends, but any purchases you make for products you use, can be written off. It can't be considered a hobby if you have sales, either. I'm not sure what he is talking about with that. If you were for instance, and Arbonne rep and only purchased items for yourself without ever doing a show or selling to someone else, then you can't deduct computer usage, purchases, etc. But, once you have a sale and earn income, it's a business. Then you get write-offs. Sorry to be so long...hehehe. It just gets me angry when someone doesn't know what they are talking about when they are supposed to be the "professional"! LOL Julie |
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hi- it actually can be considered a hobby if you NEVER make a profit. You can certainly lose money some years, but just not forever. Basically, if you NEVER make a profit, that means eventually you won't be able to take a loss, because there is no expectation of profit. If there is no expectation of profit, it is not a business (tax-wise) it is a hobby. It doesn't mean you can't deduct your expenses, but only down to zero. You can't take a loss to offset other income, like another job or your husband's income. Hope this helps. ------------------------------------------------------------------------------ Is it a Business or a Hobby? | | | | It is generally accepted that people prefer to make a living doing something they like. A hobby is an activity for which you do not expect to make a profit. If you do not carry on your business or investment activity to make a profit, there is a limit on the deductions you can take. You must include on your return income from an activity from which you do not expect to make a profit. An example of this type of activity is a hobby or a farm you operate mostly for recreation and pleasure. You cannot use a loss from the activity to offset other income. Activities you do as a hobby, or mainly for sport or recreation, come under this limit. So does an investment activity intended only to produce tax losses for the investors. The limit on not-for-profit losses applies to individuals, partnerships, estates trusts, and S corporations. For additional information on these entities, refer to business structures. It does not apply to corporations other than S corporations. In determining whether you are carrying on an activity for profit, all the facts are taken into account. No one factor alone is decisive. Among the factors to consider are whether: - You carry on the activity in a business-like manner,
- The time and effort you put into the activity indicate you intend to make it profitable,
- You depend on income from the activity for your livelihood,
- Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business),
- You change your methods of operation in an attempt to improve profitability,
- You, or your advisors, have the knowledge needed to carry on the activity as a successful business,
- You were successful in making a profit in similar activities in the past,
- The activity makes a profit in some years and the amount of profit it makes, and
- You can expect to make a future profit from the appreciation of the assets used in the activity.
For details about not-for-profit activities, refer to Publication 535, Business Expenses. | | | |
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