Six Quick Tips to Maximize your Mary Kay Tax Write-Offs

Your Mary Kay Business has many more advantages than just the income part (which is fantastic). You also get the benefit of writing off business related expenses.

Lucky for you, people have skin wherever you go, and if you are smart, you can turn at least part of your vacation into a business trip (and all perfectly legal!) Let’s take a look at some smart ways you can make this happen!

Before I get into the full article I would like to point out that the following article contains common “best” practices. If you have any specific tax questions then please contact an accountant in your state. This is in no way legal advice…. But it can save you some money 😉

OK, so here are the tips!

Have the records to back your receipts up

The most important thing to remember when you start to take advantage of write-offs is to have the information to back it up!

The chances of being audited are generally low, but if you are ever audited you will want those receipts.

With QT Office (the office management program designed exclusively for Mary Kay®), you can not only track your expenses but you will have an organized year-end tax report for your accountant that is mostly automated.

You can print this with one click (or email). Also, you can use it to fall back on anytime you may need to reference it during the year, or several years down the road (example: if you were ever audited by the IRS).

What would you do right now if the IRS came knocking? Do you have all your receipts for the last several years?

Write off your work space

Whether you have an entire room dedicated to your Mary Kay office or just work out of a space in a room in your home, you can write off the percentage of the space as an expense. This percentage is normally the amount of space that it takes to maintain that work space. For example, if you had a 1,000 square foot house and your extra bedroom was an office, and that bedroom was 200 square feet you would divide 1,000 by 200 (the total square foot by the office space) and get 5 (so you could write off 1/5 of your mortgage) on your business.

* This is true in most states, but check with your accountant to be sure!

Some other examples that could be included could your electric bill, internet, and rent (if you do not have a mortgage). Your accountant will be able to talk with you and calculate what percentage of these bills are “business expenses” if you need any help. 1/5 does not sound like a lot, but it adds up quick! … and hey, it’s MONEY back in your pocket.

Update your office equipment

If you buy anything for your office (from an office desk to an iPad to a phone), then it can be a great way to lower what you own in taxes. I bought a new iMac… partly for the write off and partly because I wanted a new computer!

The device does have to be for your business but it doesn’t mean you cannot use it outside of your business also. Just make sure you keep your receipt and file it accordingly.

QT Office has all the major expense categories listed already (from mileage to events to computers), but QT also allows you to create a new expense category for anything you want. This way you can file your expenses according to how your brain thinks. We have some “C” personalities that have VERY detailed expenses. =)

Your dining out can be a write off

Did you know that eating outside of the home is (for most families) one of their top 4 expenses (behind rent/mortgage , child care and car payment).

Why not use some of these meals out as a write off (legally now!). You could use the meal as a write-off if you spend your meal with a customer or potential customer.

As a Mary Kay consultant or director you may find that you conduct some of your interviews at a restaurant or coffee shop. Keep your receipt and make a note on your QT Office expense reports of who you have a meal with and why. If you’re still using a paper file, then write it on the back of your receipt so you remember. This way if you ever had to defend your meal out to the IRS you would be ready. Keep in mind if you have 10 meals a year with a customer that buys 1 lip gloss a couple of times a year this will not be an easy sell to Uncle Sam.

And a great tip from a very smart Sales Director: “People love anything free, and I would rather buy a coffee than a steak”. This is basically saying don’t go crazy treating everyone.

Another thought, why not buy a Starbucks card and use that when you go out with your clients? It’s easier to keep track of the one time purchase. You would just use that card when you are with a client and never anytime else.

Take a trip (Not just a vacation)

As a Mary Kay® consultant you are very lucky that you are not limited to territories. You can take advantage of this and work while you are traveling. Keep ALL your receipts, for instance: Food, gas/mileage, tolls and parking are just of a few things you can write off (If you document them properly and have the receipt). Just make sure that you take the time (even if it’s just a few minutes) to share the opportunity so your trip will legally contain some legitimate business expenses.

A few simple words like “Would you mind giving me your opinion on something?” can turn that Mocha into a write-off, and increase your customer base or team at the same time.

Just MAKE SURE YOU TRACK IT! If you are using QT Office this will be super easy because you can download the mobile app for your MK business, record the expense right on your phone, and it will send it back to the “magic cloud” and be available on your computer later. QT works great on iPads too!

Write off your Mary Kay® training

Any educational event you attend is a great write off. If you are learning how to grow your business then keep the receipt, if you are taking a tax class, keep the receipt, if you are learning what shoes go best with your new scarf, keep the receipt (see the pattern here?).

This does not just apply to career conference and seminar, this also applies to your weekly sales meeting, MKU or pace setter classes. These are all educational events that help you (teach you) how to improve your personal Mary Kay business (therefore you can use it as an expense).

These are just 6 quick tips to help you track your taxes better and make sure you get those write-offs you are allowed by having a home based business.

The details do matter and the notes on your expenses recorded in QT Office could really be important if you were ever to be questioned by the IRS.

Always go by the rule “if you could not justify it to an IRS agent, then do not risk using it as a write off”.

And ALWAYS consultant an accountant if you have any questions because rules can vary by state.