Quote:
Originally Posted by tiggerificandi I am looking for someone to give this info too. I have had my own business for many years (gymnastics business). As a hobby demo, or even just a demo that makes just the minimum in sales, it would seem to me that you would be taking a loss nearly every year.
Questions I wish someone would answer:
1) Do you have a tax id other than your social security number?
2) Do you receive a 1099 from Stampin Up?
3) Do any of you loose money on a regular basis and not get auditted by the IRS? (Red flags can go up after a loss for three consecutive years.)
Thanks to anyone that can help us trying to decide besides saying "talk to your rep". I have had many reps over the years, and some are more helpful than others. |
1) I have no tax id number
2) I do not receive a 1099...we get monthly activity statements that show our earnings, workshops, demo orders, etc...I give these to my tax guy...
3) I lost money the first year, made money (a whopping $400) my second year.
As for what it will cost you in taxes, I've never had to pay in (neither has my upline who does 6-8 workshops a month). When I had a loss, I actually saved on my city and federal taxes b/c the loss is a writeoff. When I had a gain I didn't have to pay in b/c of the amount of things I wrote off. I think you're only allowed to claim a loss for 3 years and then they consider it a hobby and not a business.
The tax thing worried me a little when I decided to be a demo...but it was a lot of worrying for nothing. As someone already said, as long as you keep good records, you will be fine. I don't claim any of my household bills and stuff even though I have a "stamping only" space b/c my tax guy figured up the amount I would get and it wasn't that much...plus he told me that that's one of the easiest ways to get audited b/c a lot of people abuse the "business workspace" thing.
I think you'll find that if you want to look at it as a business, it won't take long before you're carefully watching what you've spent vs. what you've brought in and adjust your purchases. At first I would buy buy buy...but I found I wasn't making anything and have learned to tailor my purchases to get maximum benefit for minimum cost to me.
HTH!
Contemplating becoming a Demo....
