My girlfriend has been doing Mary Kay for the last year but really hasn't committed much to it. She had sales here and there but nothing to the degree of going all out for the business, she got another job cause she wasn't making much money at all with Mary Kay and really hasn't done anything at all with it ever since, probably 2-3 months worth of hard interest in it before she gave up(hasnt sold anything back yet). I was wondering what things were needed to file her 2009 income taxes(with Mary Kay) as far as forms she needs, filing forms, need to know aspects of it and to be honest, where to begin?
I realize its a lot....but we're both lost on the different ways to approach it according to internet sources(many), so if you could help it would go a long way, thank you so much.
-Tony(D.A.H.)

You must file any self earned income (anything you earn not reported on a w2) above 400 dollars for the tax year. Now that can be offset by business expenses and in most cases, if you talk to a qulified cpa who can help you identify all business expenses, you may find your g/f operated at a loss. Bottom line is...when you go into business for yourself your tax situation gets more complicated...even if its just on the side...if she had over $400 in income she needs to file a schedule C....among other considerations.

thanks, what forms would she need to file if she made under $400.00 with her business?

Form 1040 has a line for other income where you may report it.

Your girlfriend should include all her income and expenses on Form Schedule C of the individual tax return Form 1040. The important thing to realise is that your girlfriend may be able to claim certain expenses that were directly incurred in connection with activities as a Mary Kay consultant.

But, remember, if the activity is deemed not be a serious activity, the IRS would deem this activity as a hobby activity and deny any losses generated from this business. Thus, I would be rather conservative with deducting excessive expenses, and the only expense I would deduct would be as follows;

1. Purchases of products that were sold.
2. Any meals and promotions expenses spent on inviting potential customers.
3. Marketing or Advertising expenses spent.
4. Business cards expenses.
5. Some portion of cell phone expenses (expenses incurred during the duration of the period your girlfriend was a Mary Kay Consultant).
6. Mileage generated whilst visiting customers.
7. Any licenses or fees paid to Mary Kay to become their independent consultant.
8. Any expenses spent directly related to Mary Kay activity.

Here are both instructions to Schedule C and an actual copy of the Form Schedule C. I am sure that you will gain additional insight into this form by clicking on the 2 links below.

http://www.irs.gov/pub/irs-pdf/i1040sc.pdf (Actual Form)

http://www.irs.gov/pub/irs-pdf/f1040sc.pdf (Instructions to Schedule C)

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