My wifes' Avon business & tax question

Discussion in 'US Taxes' started by Jim Caldwell, Sep 24, 2003.

  1. Jim Caldwell

    Jim Caldwell Guest

    My wife is building up her Avon sales business pretty good, and I think she
    has to file/pay taxes in advance if she anticipates netting over $600 in any
    quarter. She could be getting close to that. So I have obtained Quickbooks
    for her (she likes accounting), and told her to start keeping complete
    records so she knows what her monthly net is. I think that for income tax
    purposes she would want to formally start a business, registering a name at
    the courthouse, right? Or can she just file her business income tax return
    under her personal name? If not for income tax purposes, it seems like a
    good idea to establish a business, as she would then be able to buy what she
    needs to conduct business, and not have to pay state sales tax. Also, next
    year we could claim part of the car expenses she uses for Avon as a
    deduction. Should we just go see a good tax preparer to advise us on this,
    and tell us what we can deduct?
     
    Jim Caldwell, Sep 24, 2003
    #1
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  2. In article <bksi2m$5kbae$-berlin.de>,
    Jim Caldwell <> wrote:
    >My wife is building up her Avon sales business pretty good, and I think she
    >has to file/pay taxes in advance if she anticipates netting over $600 in any
    >quarter. She could be getting close to that. So I have obtained Quickbooks
    >for her (she likes accounting), and told her to start keeping complete
    >records so she knows what her monthly net is. I think that for income tax
    >purposes she would want to formally start a business, registering a name at
    >the courthouse, right? Or can she just file her business income tax return
    >under her personal name? If not for income tax purposes, it seems like a
    >good idea to establish a business, as she would then be able to buy what she
    >needs to conduct business, and not have to pay state sales tax. Also, next
    >year we could claim part of the car expenses she uses for Avon as a
    >deduction. Should we just go see a good tax preparer to advise us on this,
    >and tell us what we can deduct?


    Your wife is known, in IRS terms, as a sole proprietor of her, um,
    sole propriotorship.

    For federal tax purposes all she needs to do is file Form 1040
    Schedule C and if she has a profit of more than $433, a Schedule
    SE as well. If she anticipates owing taxes, see IRS Publication
    505 for estimated taxes and file Forem 1040ES to vcalculate and
    pay estimated taxes 4 times/year

    The IRS offers Publication 334 [The Orange Book] for small
    business owners. Call 800-TAX FORM to order 9It is pretty large
    for downloading)

    If she has employees (not subcontractors) she will need to obtain
    an EIN, and meet a lot of other requirements for payroll taxes,
    and if she pays subcontractors over 600/yrear she files
    form 1099-MISC for them.

    There might be state and local rules as well, and a local tax
    professional can indeed help her to meet these local rules and
    help her organize her records to make tax preparation easier.
    --

    __
    Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
     
    Arthur Kamlet, Sep 24, 2003
    #2
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