Tax Deductions

[5kids4us]

I found some references to tax deductions in other threads but it seems like it deserves it's own. I've been filing schedule C for my business for 20 years. I've got it down so that it takes very little time because I keep great records and use Quicken which I set up with the tax categories.

I highly recommend having a separate checking account and credit card just for your business.

If you look at schedule C there are essentially three parts. Income, Expenses, and Inventory. The results of the Inventory worksheet gets entered as an expense then. You just have to record the cost of your inventory on Dec 31st of each year.

You cannot deduct your personal skin care, cosmetics, lotions, etc. You are supposed to subtract out personal use from your inventory on schedule C. But you can deduct your demos and I consider the first of every item to be a demo, even if I only use it on myself. So the first mascara is a demo, but when I need another mascara for my personal use, I transfer money from my personal checking to my business checking (at cost). Demos don't actually get deducted though. They just show up as a loss of inventory between January 1 and Dec 31 and thus get deducted from your profits.

Mileage is a great deduction. I keep a notepad in my car to record mileage.

You do have to have profits every few years and put forth some effort at the business. But your first year losses, for example, reduce your family taxes, so don't neglect to file a schedule C just because you are only a few months into the business.

To deduct a part of your home or clothing, it is supposed to be used exclusively for BeautiControl. The home office deduction is one area where you may want to consult a tax accountant. Their fees are also deductible.

[hacketttroi]

Yes, I had the girl that had told me about personal use double check, she found that it does not include personal skin care makeup etc.