Mary Kay Taxes – Getting Ready for End of Year

April 15th is a dreaded day for most Americans because it’s the end of the Tax dead-line. Business owners also dread another day: December 31st, because it’s time to get all that tax information in order.

For the average 9 to 5 employee your taxes are withheld and sent to the government on your behalf so you don’t have much to do. Business owners however (like Mary Kay businesswomen) often need to make decisions prior to the end of the year that will affect their taxes for that year.

For Mary Kay®, taxes on your products were paid when you placed your order and recouped when you sold your products, but you still pay taxes on your income. Here are a few things to think about as you approach the end of the year. Please note that this is not tax advice. Please talk to an accountant or other tax professional for tax advice in your state. These are just tips that have been suggested to me over the years. They are good though, so I wanted to share them with you.

Maximize Deductions
You have a lot of expenses in running your business. Will you get the proper credit when filing your taxes? You may want to buy a computer for business use before the end of the year to include that expense on the current year taxes. Don’t forget about the little things like mileage, dry cleaning, postage, etc. As an independent beauty consultant you should be itemizing as much as you can (it’s not nearly as advantageous to do the EZ form).

Use Write-offs
Are some of your Mary Kay® products for personal use or demo? Do you write them off on your taxes? Read more about creating tax write-off invoices and more about write-offs in general.

Don’t know what you can write-off? Ask your Director

After all, your director has done this for years! That’s what she is there for. A simple question like “I want to make sure I’m not missing any deductions, could you make any suggestions of a few that I may have missed?”.

Keep your receipts!

“If you don’t have a receipt, you don’t have a write-off” – IRS (ok, so the IRS did not really say that… but they could have.) Even if you do not have your receipts organized, make sure you have them. There is a dirty 5 letter word called “audit” that could make for a very sad start to the year.

Start early

Most people start doing their taxes late December…. (you probably know how much you can get done when it’s down to the wire). I’ve been there too, so I’m not calling anyone out. From experience, I call tell you that you want to start at least a month early if you are doing this all by hand (especially because of your invoices and receipts; you will have a ton of these built of from the year).

 

If you use QT Office to run your Mary Kay® Business, then it will track your income and expenses. Most of the work is done automatically so you really could start as late as you want…. the work is pretty much done for you. Your profit is tracked from your invoices, your expenses are tracked from your product purchases and any tax write-off invoices that you have created. Even things like loaned and borrowed products are tracked.

It is very easy to add your own sources of income (like commission checks) and expenses (office supplies, postage, computers, etc.). QT puts all of this information in a tax report for you which you can print or email to your accountant at the end of the year. This report updates in real-time throughout the year so you can refer to it anytime to help you make business decisions that will impact the current year. QT Office automates many things so you can spend less time thinking about taxes and more time focusing on IPA’s (Income Producing Activities).

January first is a great time to start “fresh”. If you’re at leadership feel free to stop by our booth. Someone will be more than happy to walk you through the software.

 photo credit: DonkeyHotey via photopin cc