Making Scents of Taxes!
Let’s break down taxes in your business! Read about how to manage your income and expenses, break down your tax forms, and more! So, let’s dive in and make scents of taxes!
This is the first piece of distributor-focused education available for Topanga Scents Distributors. Be sure to sign up for My Financial Snapshot to receive information like this in the future!
Get organized, stay organized!
What works best for you? Everyone has different organizational preferences. Some people prefer keeping a box of receipts, some prefer digital, and sometimes it is a mixture. Explore different options and choose the one that suits your style and needs.
Is a separate bank account right for you? Consider opening a separate bank account specifically for your Topanga Scents business. This will help keep your personal and business finances separate, making tracking your income and expenses easier.
How often do you need to keep up with income and expenses? The temptation with taxes is to only focus on it once a year, but with a business keeping up more frequently can ensure you are taking advantage of your tax-deductible expenses. Getting in the habit of tracking your income and expenses monthly, quarterly, or yearly will depend on the needs of your business.
Income, Expenses, and Tax Forms!
Sales, sales, and more sales! You have various income sources as a Topanga Scents distributor. It’s important to keep track of all your sales, whether they come from the distributor website or other payment methods like cash, checks, Venmo, or Cash App. Maintaining detailed records will help you report your income accurately on your tax forms. When you earn over $600 from Topanga Scents you will receive a 1099-NEC tax form to report on your tax return!
Tax-Deductible Expenses: One of the perks of running a business is deducting certain expenses from your taxable income. Keep track of your business-related expenses, such as product samples, distributor fees, travel, and any other expenses directly related to your Topanga Scents business. By maximizing your deductions, you can reduce your overall tax liability.
What is a Schedule C? If you’re actively involved in your Topanga Scents business and it generates a profit or loss, you’ll likely need to file a Schedule C on your tax return. Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
- Your primary purpose for engaging in the activity is for income or profit.
- You are involved in the activity with continuity and regularity.
ExpensesTake advantage of your business expenses!
Are you taking advantage of all of the tax-deductible business expenses you can?
Check out the list of all of these tax deductible expenses that are available on a Schedule C!
If you are incurring expenses for any of these categories, be sure that you are keeping track of those expenses. The Side Hustle Tool on My Financial Snapshot helps you keep track of these expenses every month!
Distributor fees, party planning supplies, cost of goods sold, subscriptions, travel (Convention!), and more are common expenses for Topanga Scents Distributors.
This material has been prepared for informational purposes only. You should consult your own tax preparer, CPA, or advisor when filing your tax return.
The Side Hustle ToolBringing your business together!
The Side Hustle Tool! My Financial Snapshot offers features tailored to small businesses and side hustles. It allows you to track your income and expenses effortlessly, saving time and potential headaches during tax season.
Learn more about the side hustle tool and our partnership with Topanga Scents, here!
Check out a demo of the the side hustle tool, here!
Keeping Your Business Clean! My Financial Snapshot provides distributor-focused education and support. Giving you access to resources that help answer your business questions!