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5 Answers

How do Mary Kay tax deductions work?

Asked by: epondel 750 views YA Discussion

I just started Mary Kay and have put about $ 1000 in toward products for demos and inventory.
My sales director assures me it’s all tax deductible, but what does that really mean? If I don’t make the $ 5, 000 or so that’s required for someone to pay taxes, how do I get this money back?

5 Answers

  1. card-ron on Nov 15, 2012 Reply

    First, you are required to file a federal return if your gross income from self employment (Mary Kay) is $ 400 or more for the year, not “$ 5,000 or so.” Second, you don’t “get this money back.” Instead, you report it as a business expense on your Schedule C. This simply reduces your taxable income.

    Let’s say you earn $ 2000 for the year with $ 1000 in expenses. You only pay tax on the $ 1000 profit. The $ 1000 in expenses is not refunded to you.

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  2. Wayne Z on Nov 15, 2012 Reply

    You don’t

    A business related tax deduction can not, on its own, create a refund.

    It can reduce your taxable liability if you have income but it can not give you a refund.

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  3. Quick Answers on Nov 15, 2012 Reply

    To add insult to injury, you can’t deduct inventory until it’s actually sold.

    Start by reading IRS publication 334. Then get out there and sell.

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  4. Bobbie on Nov 15, 2012 Reply

    MORE than 400 of NET PROFIT from your schedule C and the SE of your 1040 income tax return that you will be required to fill and file and you will owe some self employment taxes for the 2012 tax year during the 2013 tax filing season for this purpose and time in your life.
    http://www.irs.gov and use the search box for the below referenced items to try and learn some of the things that you really do NEED to KNOW to try and get your business and your record and bookkeeping set up correctly in order to have the written proof of all of receipts for payment amounts that you do receive daily and of your ordinary and necessary business expenses on a daily basis in case the IRS does every want you to VERIFY any of the information that you enter on your schedule C and your SE of your 1040 income tax return for that tax year.
    Starting a Business


    Publication 583 (12/2011), Starting a Business and Keeping …


    Small Business and Self-Employed Tax Center


    Hope that you find the above enclosed information useful. 11/14/2012

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  5. tro on Nov 15, 2012 Reply

    you don’t get the money back, the IRS is not refunding you money you invested in your business
    the expenses you incur for business purposes, ie. buying products(is cost of goods) the demos, samples etc. are business expenses
    you report your income on Sch C, the business expenses and if you have a net profit of $ 400 or more you will owe self employment tax(Sch SE)

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