ok, I have a Mary KAy buisness. My husband is military and i stay at home(MK MY only income). He will be filing from our home state(whish has no state tax), and if I file I have to file for KY(which does have state tax). Q1:How would we do this on a joint return or do we file married finling seperate?
Also, I have not been collecting taxes on orders from people(military disc i offer).I also have not made any "profit" meaning everything i have invested, plus supplies and other costs is more than what I have brought in. With my at home biz I know I can deduct expenses like gas,utilities etc..operating costs. (but I don't have many receipts to prove it, just some shipping inventory sales slips, and a few purchase receipts.Q2: what would be financially better and legal for us to do? Do I file my buisness and get those deductions since I have not made enough OR do I not file it at all? I don't know!!
2007-12-07 03:15:54 · 3 answers · asked by ArmyAngel 2 in Business & Finance ➔ Taxes ➔ United States
It appears that you are not operating your business to turn a profit. That classifies it as a hobby. Your business expense deductions are therefore limited to whatever money you brought in; you may not take a tax loss on this.
You will have to file a state return in the state where you live. Your husband's income can't be taxed there but yours certainly can. You'll probably zero out your income with your expenses so there'll be no tax due but you probably do need to file. Whether that can be a joint return or must be separate will depend upon state law.
You also have the issue of sales taxes to the state where you live. If any of your sales were made locally you are required to collect and render sales taxes on those sales. Your military dependent status does NOT exempt you from state sales tax laws, nor does selling to military and their dependents.
2007-12-07 03:35:43 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 1⤋
Married Filing Separately is the least desirable filing status to ever use. If you do not make a profit for at least two out of five years, then the IRS will consider you Mary Kay Stuff as a hobby and not a business. I know Avon will report to the IRS if any of their representatives buys at least $5,000 worth of products. What will Mary Kay do? I think you need to talk to your sponsor/manager and check out "Mary Kay's web site". I bet they have a lot of information on managing and improving your business.
2007-12-08 00:15:07 · answer #2 · answered by Gary 5 · 0⤊ 0⤋
go on to in touch and go under tax and legal it will explain what you need to do.
2007-12-07 07:30:51 · answer #3 · answered by Anonymous · 0⤊ 2⤋