Who has experience with network marketing and taxes?
I received a 1099 from my network marketing company for commissions and overrides. I also received a statement from them called Taxable Income REcap that shows how much I spent on Purchasing Products. You buy products at wholesale and sell them at retail. The difference is your income or "right now" money. This money is not easily tracked because they can’t tell how much you sold at full cost, how much you sold at discounts and how much you kept for personal use or as gifts to further your business. Do I need to somehow claim this on my taxes as income or should I just claim what was noted on my 1099? There is also a box on my 1099-MISC form that is checked that says "Payer made direct sales of 00 or more of consumer products to a buyer (recipient) for resale." Does this relate to me or is this the company just saying that I bought more than 00 worth of stuff to sell as I see fit? Anyone have any experience with this on their federal taxes?
Tagged with: commissions • federal taxes • money • network marketing company • personal use • purchasing products • recipient • taxable income • wholesale
Filed under: MLM Online Biz
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You will need to fill out a schedule c. That is where you report the cost of goods sold, the income you made and how much product you have left. I would claim the income on my 1099 and anymore that you might have from this business. All a 1099 is what they(the co.) has pd you. They do not know what you spent or made elsewhere. You can look up instructions for a schedule c on IRS.gov. Type schedule c in the key words box.
The 1099 is income. You need to figure out how much you started with in inventory, your purchases and how much you ended with in inventory. The difference is what you sold, or cost of goods sold.
1099 income goes on line 1 of sch C
Cost goods sold on line 4
Gross profit on line 5.
Then you deduct EVERYTHING you can think of. Computer, internet, phone bill, meetings etc etc
You will probably end up at a loss which you can deduct from your job income.