It’s that time of year again – income tax time. If you still haven’t filed your income tax return with the IRS you still have almost a month.
This is also the time of year when some direct sales consultants from almost every company are scrambling or panicking because they don’t know what to do.
Consultant groups and pages are teeming with threads asking for help with their taxes. Below are some tips to help you survive taking care of filing your income tax as an independent business owner.
Note: I did not think this needed to be said, but based on the hate-mail I’ve received, the typo in the above graphic is intentional. Call it irony, wit, sarcasm, ire, whatever you want; it’s making the point of paying attention to details. I am very well aware one of the words is spelled wrong. But thank you to all those who called me stupid and worse.
TIP #1: Outsource it
Not likely the info you were hoping for, is it? I figure if you already file your own taxes and are familiar with how to handle business filings, you likely would not be reading this article. My advice is that if you don’t know what you’re doing, hire a professional. That’s what I do. Then my time can be better allocated to doing what I do best. Also tax rules change every year so a professional is best to maximize your return and save you oodles of time trying to learn all the changes yourself.
TIP #2: Don’t take advice from your peers
Having survived an IRS audit, it really concerns me when I see independent consultants ask other consultants for tax advice on company forums. Maybe they should ask for legal and medical advice while they’re at it. Just because someone can sell wax, recruit or coach hosts does not make one qualified to give tax advice.
I cringed when I read a forum post of one consultant who publicly shared with a large audience of consultants that she writes off her entire year of mileage on her family van as a business expense because she had a magnetic sign on the side of her vehicle. This is clearly prohibited in IRS mileage regulations. If she were to claim 20,000 miles because of her little Vista Print magnet, even though she may have actually only driven 870 miles directly related to business travel, it’d tax fraud. Yet her informative post, albeit erroneous, was met with a multitude of replies of gratitude and appreciation. So now because of one consultant’s wrong information, a number of other consultants were going to do the same. GIGO – Garbage In, Garbage Out.
TIP #3: Use credible resources
If you’re determined to file your own taxes in spite of your lack of tax acumen, then at least use credible sources to help you. You may be able to get qualified advice from your local Chamber of Commerce or Small Business Association. Mr. Google may help you too, just ensure you’ve vetted your resources and don’t just take the word of any blogger or independent consultant (even if it is your sponsor – if he/she is not a professional tax preparer, don’t rely on your upline for tax advice).
TIP #4: Organization
If you’re just now trying to locate all of your receipts and organize your 2013 expenses, then the advice to plan ahead isn’t going to help you for this year. But now is a good time to set up a system for your 2014 taxes.
There are financial software programs such as Quick Books and Quicken that will help you stay organized. If you don’t want to use these software programs, you could use something simple such as an Excel Spreadsheet and a large envelope for receipts. If you don’t have MS Office with Excel then you can use a spreadsheet that’s available in Google Docs. There are so many options, many of them free, that there is no excuse not to have some system on your computer to track your expenses, as you accumulate them.
Anytime you purchase business supplies, training materials, advertising or anything else to do with your business, enter it on your spreadsheet, then file the receipt in your envelope. Do it as your get them else next year at this time you’ll end up with the same mess you have now.
Tax time need not be a stressful time. Each year I hear of independent consultants who are pulling their hair out because they’re trying be an instant accountant, or because they are scouring the house for their receipts and trying to get all their ducks in a row before their scheduled CPA appointment.
It’s not too late to set a New Year’s (new tax year) Resolution. Perhaps starting today you can resolve to make your annual tax time painfree from this point forward.
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About the Author: Laurie Ayers is a Michigan work from home mom and a Superstar Director with Scentsy Wickless Candles. She enjoys helping men and women start and maintain a home based business in the US, Canada, Mexico, Australia, New Zealand, Puerto Rico, Germany, Ireland, UK, France, Austria and Spain. To download a FREE Start Up Guide which provides more details about how to start a home business as well as to learn about our compensation plan go to www.thrivingcandlebusiness.com/how-to-start-a-candle-business/