As a Mary Kay professional, you are an independent contractor and are therefore responsible for paying your own taxes. Whether this is your first year or your fifth, tax returns can be pretty daunting for the self-employed. We’re going to share a few tips to be help you navigate the deductions associated with your small business. Tax deductions are expenses that can be subtracted from your taxable income, which could lower the amount you need to pay come April 15th!
One of the biggest expenses for the small business owner is the home office. Setting aside a room in your house and using it exclusively for your business will get you the highest deduction. Deductions are calculated by how much you use each thing for your business vs. for another purpose. For example: If you have a laptop that you purchased for work but use it 60% for Mary Kay and 40 % for personal use, you can only claim 60% of the purchase price as a deduction. If you’re looking to get the full deduction, you may want to stick to using the family computer for anything not work related. The same goes for phone service, internet, fax machines, office supplies etc.
Another large part of your Mary Kay expenses are most likely travel related. Did you know that you can track mileage, gas and meals eaten with clients? If you’re away from home on business, airfare and hotel costs are also tax deductible.
The most important thing to keep in mind is that even small and seemingly insignificant things, such as gift wrapping and business cards, will add up to big savings on tax day. Good record keeping is essential to making the most of your tax deductible expenses.
Entering your receipts on a weekly or even monthly basis into a tool like Pink Office will simplify your Mary Kay returns. If you aren’t already a customer, sign up for our free 30 day trial today and be well on your way to simpler tax returns in 2013!