Solved: I am an avon rep how do I report income, expenses and profit
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New Member

I am an avon rep how do I report income, expenses and profit

 
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Level 7

I am an avon rep how do I report income, expenses and profit

Yes, a direct-selling business like Avon is reported on Schedule C, included in TurboTax Home & Business (and TurboTax Self-Employed Online). 

The easiest way to to find Schedule C in TurboTax is to use the Search box at the top right side of the TurboTax header. Enter "schedule c", hit Enter, then click "jump to schedule c". This will take you directly to the start of this section.

Follow the prompts to describe your business activity, then enter your income and expenses. You may be asked for a Business Code: most direct sales representatives use business code 454390 (Other direct selling establishments) and use the Cash Method.

Income may be reported on Form 1099-MISC, 1099-K, or entered under General Income under Business Income.

If the merchandise you purchased is for resale, it is considered Inventory. If you just started your business this year, your beginning inventory is $0 and the ending inventory is the cost of the products that you still have (did not sell). "Tell Us the Cost of Your Goods" should be the amount you paid to purchase the items from the company. If you used any products for yourself, you will enter than information as well (these expenditures are NOT deductible expenses).

If the items you purchased were used for advertising (not resale), you would include the amount you didn't use yourself under Other Common Business Expenses | Advertising. If you had product that was consumed for demonstration purposes, that amount would be entered under Supplies.

Other business expenses are listed under the Business Expenses section of your business.

You may claim a Home Office Deduction if you use a dedicated space in your home to store inventory and conduct business. The rules are very specific, so be sure to answer all questions as accurately as possible.

You may also claim Vehicle Expenses for mileage directly related to your business.

Sales taxes paid and collected are reported to your State Tax Office, and are deductible business expenses on your income tax return.

Be sure to keep good records.

View solution in original post

3 Replies
Level 7

I am an avon rep how do I report income, expenses and profit

Yes, a direct-selling business like Avon is reported on Schedule C, included in TurboTax Home & Business (and TurboTax Self-Employed Online). 

The easiest way to to find Schedule C in TurboTax is to use the Search box at the top right side of the TurboTax header. Enter "schedule c", hit Enter, then click "jump to schedule c". This will take you directly to the start of this section.

Follow the prompts to describe your business activity, then enter your income and expenses. You may be asked for a Business Code: most direct sales representatives use business code 454390 (Other direct selling establishments) and use the Cash Method.

Income may be reported on Form 1099-MISC, 1099-K, or entered under General Income under Business Income.

If the merchandise you purchased is for resale, it is considered Inventory. If you just started your business this year, your beginning inventory is $0 and the ending inventory is the cost of the products that you still have (did not sell). "Tell Us the Cost of Your Goods" should be the amount you paid to purchase the items from the company. If you used any products for yourself, you will enter than information as well (these expenditures are NOT deductible expenses).

If the items you purchased were used for advertising (not resale), you would include the amount you didn't use yourself under Other Common Business Expenses | Advertising. If you had product that was consumed for demonstration purposes, that amount would be entered under Supplies.

Other business expenses are listed under the Business Expenses section of your business.

You may claim a Home Office Deduction if you use a dedicated space in your home to store inventory and conduct business. The rules are very specific, so be sure to answer all questions as accurately as possible.

You may also claim Vehicle Expenses for mileage directly related to your business.

Sales taxes paid and collected are reported to your State Tax Office, and are deductible business expenses on your income tax return.

Be sure to keep good records.

View solution in original post

New Member

I am an avon rep how do I report income, expenses and profit

How do i report my earnings that i make from avon on my taxes

Level 15

I am an avon rep how do I report income, expenses and profit

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax.  You can enter Self Employment Income into Online Deluxe or Premier but if you have any expenses you will have to upgrade to the Self Employed version.  How to enter self employment income

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

 

For the future, you should use a program like Quicken or QuickBooks to track your income and expenses.  There is a QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed  return....

http://quickbooks.intuit.com/self-employed

 

You need to report all your income even if you don't get a 1099Misc. You use your own records.  You are considered self employed and have to fill out a schedule C for business income.   You use your own name, address and ssn or business name and EIN if you have one.   You should say you use the Cash Accounting Method and all income is At Risk.   

 

After it asks if you received any 1099Misc it will ask if you had any income not reported on a 1099Misc. You should be keeping your own records.  Just go through the interview and answer the questions.   Then you will enter your expenses.

 

FOR 2019

Here's a blank schedule C to see how it works

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

 

For 2019 Schedule C Net Profit or Loss goes to 1040 Schedule 1 line 3.  Then the total on schedule 1 line 9 goes to 1040 line 7a.

 

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  

 

The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 Schedule 2 line 4 which goes to 1040 line 15.  The SE tax is in addition to your regular income tax on the net profit.  You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 14 which flows to 1040 line 8a.  Turbo Tax automatically calculates the SE Tax and Adjustment.

 

Here is some IRS reading material……

 

IRS information on Self Employment

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

 

Pulication 334, Tax Guide for Small Business

http://www.irs.gov/pub/irs-pdf/p334.pdf

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