Signed up for Amway, but don't have any profit

[Whit97]

So I signed up for Amway, and have yet to make any profit since I am so new to it and life has been busy. Do I need to include that I registered for an IBO in my taxes? I have no income from it, but will I get in any sort of trouble if I don't include it in my taxes? I don't even have a W2 or anything from them.

[cgervasi]

I think Amway people are independent contractors, so they can get a 1099, not a W2.  The 1099 shows all the money they paid you, and you show all the money you spent on your Schedule C.  You're also supposed to generate 1099s for people you pay as independent contractors.  Amway may handle that.  I'm never clear on exactly who gets 1099.

You don't need a business entity like LLC or S-corp.  You can just be a sole proprietor without any accounting help.  You can open a bank account as your name "doing business as" (DBA) [a business name of your choosing].  (This is based on my past as a contract employee. I am not an expert in accounting or law.)

I think the very premise of network marketing orgs like Amway is a scam.  The premise is you're buying into a network to promote products, but in the age of the internet that looks like a fig leaf for a pyramid scheme.  But I hope it works for you anyway.  Keep the money in that DBA account so you can track how much you're making or investing in the business.   

[BenT9]

That is good advice for Whit97 but her question was does she have to report anything.  The answer is no.  Since you haven't begun your business and have had no income form it no need to report anything.  You received some good advice from cgervasi, a person who stated they are not an expert but I think  they learned well from experience.  If you have any costs you should keep track of them since they can be amortized once you get your business going.  Unfortunately I agree that Amway is more of a pyramid scheme than a business opportunity.