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Tax Year Prior to 2020: My wife sells Lularoe clothing. How do I know what is considered income?

We got no income on our 1099.

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Level 5

Tax Year Prior to 2020: My wife sells Lularoe clothing. How do I know what is considered income?

Her gross income is every dollar she received.   Then, expenses are taken from that on subsequent screens.  Since no 1099-MISC was received, you will say No to that and later will be able to enter General/Other income in the business section. 

Note:  If all payments from customers are made directly to the company, then you will only report the gross commissions and other income actually paid to your wife.

You will file a Schedule C for the business.  The Schedule C will flow onto your individual income tax return (Form 1040) and be netted with other personal income and expenses.

The result for your Gross Receipts on line 1 of your Schedule C should be every dollar she actually received, including all your sales taxes. 

How to get to that area  While inside the software and working on your return, type Schedule C in the Search at the top of the screen (you may see a magnifying glass there).  There will be a popup that says Jump to Schedule C.  Select that to get to the general area. 

When you set up her business, you can use her own name, address, and social security number (if you don't have a business name or EIN).

Follow through all the areas in the Business section of the TurboTax software and it will provide you with a lot of assistance. You'll notice blue links that have more information and details about the particular sections that will be extremely helpful. 

Also, this link may be helpful to you IRS Small Business Help Center .


What is a Schedule C?

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