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karaann92
New Member

How do i file when bought the mary kay kit and inventory and didn't sell any of it?

I started mary kay I bought the kit and inventory. I never sold anything and I didn't work all year. I was told I can use what I bought as a deduction but I didn't work all year so I made no money. How do i file or do i?
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1 Best answer

Accepted Solutions
MichaelDC
New Member

How do i file when bought the mary kay kit and inventory and didn't sell any of it?

Yes, you can still claim business (Mary Kay) related expenses, even though you had no revenue.

You can deduct expenses as long as you can prove that you opened or were in business in the year expenses were incurred. To be deductible, a business expense must be both ordinary and necessary.

Also, the IRS expects that if you start a business, you intend to make money at it. If you don't, your business is likely to be a hobby, if which case you can only claim expenses to the extent of your hobby income. To determine if your business is a hobby, the IRS looks at numerous factors, including the following:

  • Do you put in the necessary time and effort to turn a profit?
  • Have you made a profit in this activity in the past, or can you expect to make one in the future?
  • Do you have the necessary knowledge to succeed in this field?
  • Do you depend on income from this activity?
  • Are your losses beyond your control?

As a Business, you are considered to be self-employed. You report both income (if any) and expenses on Schedule C/Business Income & Expenses.

Also, take care when reporting your "inventory" under what is called "Cost of Goods Sold" and account for how much of your purchases during the year was "withdrawn for personal use".

TurboTax will guide you step by step through the process. 

  • Type in "business expenses" in the search box in the right hand corner of your screen
  • Click jump to business expenses.

Note: Based on your expenses, you may have to upgrade to a higher version of TurboTax. 





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1 Reply
MichaelDC
New Member

How do i file when bought the mary kay kit and inventory and didn't sell any of it?

Yes, you can still claim business (Mary Kay) related expenses, even though you had no revenue.

You can deduct expenses as long as you can prove that you opened or were in business in the year expenses were incurred. To be deductible, a business expense must be both ordinary and necessary.

Also, the IRS expects that if you start a business, you intend to make money at it. If you don't, your business is likely to be a hobby, if which case you can only claim expenses to the extent of your hobby income. To determine if your business is a hobby, the IRS looks at numerous factors, including the following:

  • Do you put in the necessary time and effort to turn a profit?
  • Have you made a profit in this activity in the past, or can you expect to make one in the future?
  • Do you have the necessary knowledge to succeed in this field?
  • Do you depend on income from this activity?
  • Are your losses beyond your control?

As a Business, you are considered to be self-employed. You report both income (if any) and expenses on Schedule C/Business Income & Expenses.

Also, take care when reporting your "inventory" under what is called "Cost of Goods Sold" and account for how much of your purchases during the year was "withdrawn for personal use".

TurboTax will guide you step by step through the process. 

  • Type in "business expenses" in the search box in the right hand corner of your screen
  • Click jump to business expenses.

Note: Based on your expenses, you may have to upgrade to a higher version of TurboTax. 





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