Manual The Business End of Direct Sales – Accounting and Taxes (Direct Sales Help Book 5)

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  1. Direct Selling Defined and Explained
  2. What Every Work-from Home Woman Needs to Know about Taxes
  3. How to Prepare a Profit and Loss (Income) Statement
  4. About the Author
  5. Author Entrepreneur. How To Sell Books And Products Direct To Customers | The Creative Penn

In-person demonstrations are a huge part of direct selling. Consider your product or service. Is it best sold in-person or could someone experience it just as well in a store or online? Solution-based products or services do well in this industry, says Chastain. Herrin agrees, adding that it is important to not just focus on one product, but make sure your company is fulfilling a market need. Instead of zeroing in exclusively on your product or service, make sure to consider those persons who will sell your product—your independent consultants, Chastain suggests.

Direct Selling Defined and Explained

There is one major difference between a brick-and-mortar company and a direct sales company: the latter has an all-volunteer workforce. They work when they want to and quit when they want to. This can be a tough pill to swallow for 9 to 5ers-turned-entrepreneurs, but there are ways to ensure continuous sales. Herein lies the cash flow curve of direct sales businesses. According to Chastain, most of these companies make little money in their first three years because it takes that long to circulate a concept and build organic growth. She says that from year four through eight, many companies experience explosive growth, but then things plateau or simply drop off.

Focus all your energy on your top performers and you will surely see a decline, she adds. Instead, continuously fill the ranks behind the veterans to help maintain steady sales. Skip to content. Menu Menu. United States Change Country. Help Log In. Cash Back Rewards Home. Issuers and Acquirers Providers and Developers. Small to Mid-Sized Businesses. Organizational costs are expenses that come from establishing or organizing a business as a partnership or corporation. Both may be claimed as business expenses. Note: Many things, including tax deductions, are determined by how your company is structured.

If you plan to grow significantly and add employees, speak with a professional about the proper way to incorporate your business and the resulting tax implications. Boxes, boxes and more boxes. In both the United States and Canada, you are eligible to deduct portions of your mandatory contributions to government programs. This applies in both the United States and Canada. A business expense is a cost you incur as part of doing business.

What Every Work-from Home Woman Needs to Know about Taxes

There are lots of fancy words and terminology thrown around this concept, but it basically boils down to common sense. If an expense is a normal, expected cost for your industry, you can generally claim it. If it feels like a stretch, it just might be. In both the United States and Canada these costs are deductible. However, in Canada, the requirements for deducting advertising costs are more strict.

If you have unpaid invoices, you may be able to deduct them. However, you will have to provide documentation that these debts are uncollectible. If you are using your personal car or truck to drive between worksites, visit clients or for other routine business practices, you may write off operating and maintenance expenses including:.

Our friends at MileIQ passed along this important note for the tax year and going forward:. Tip: Keeping a log of business mileage is a valuable tool for documenting your car and truck expenses. While pen and paper will work, many expense tracking apps also feature mileage logs. Most businesses choose to make charitable donations as part of a commitment to core values and community service.

In addition to the social good, charitable donations can also help at tax time. Expenses related to the purchase, registering or protection of intellectual property are generally deductible. Interest on any loans used specifically for your business is deductible. However, you will need to ensure that you have records proving business use.

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Legal, bookkeeping, accounting, tax preparation and other professional service fees that you accrue in the course of doing business may be deducted. Depending on the nature of the work, these costs may either be considered standard deductions or capital expenses. All work and no play can make one very hungry and quite lonely. Thankfully, for the most part, the IRS and CRA seem to understand that food and entertainment are part of doing business. The TCJA used some wording that confused many people about what's deductible and what isn't in terms of meals and entertainment. This article from the Journal of Accountancy helps clarify.

You may also be able to claim non-cash gifts and rewards as deductions. Did you know that box of paper clips you just bought can actually be claimed as a tax deduction? The costs of many other common business tools and services may also be written off. In order to spur innovation and economic development, both the United States and Canada offer research and development credits, which are like tax deductions, only better.

The wages and benefits you provide for employees are not a one-way street. In addition to rewarding a job well done, certain components of payroll and other compensation are deductible including the cost of online payroll applications and tools. Using Line on Form T , employers may deduct the following wage-related expenses :. In both the United States and Canada, you may deduct phone, internet or utility gas, oil, water, etc.

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  • Direct Sellers and Taxes – How Does it Work?.
  • Direct Selling Defined and Explained.
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  • The Comprehensive List of Small Business Tax Deductions?
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Note: If your office is home-based, these items are claimed under the home office deduction. You can actually deduct taxes from your taxes. When you travel overnight for business, you may claim the costs of transportation car, bus, train, plane, etc. The good news — software costs can be deducted. This helps them keep track of records to support expenses proactively all through the year. An ounce of prevention is worth a pound of cure. A stitch in time saves nine. If you want to maximize deductions and avoid last-minute mistakes, you must put best practices in place right from the start:.

If like me, your mind begins to liquefy after a certain amount of time spent on the IRS or CRA websites, these folks can make your life a whole lot easier. Wagepoint has gathered this information from several sources and has done its best to ensure accuracy. As tax laws are constantly changing, it's important to ensure that you have the most accurate and up-to-date information.

Blogmaster, content creator and inbound marketing guru at Wagepoint, Michelle enjoys simplifying complex payroll topics and generating articles with actionable advice for small businesses and startups. When not at the keyboard, she enjoys chocolate, running and quality television not always in that order. How can cloud-based apps and software help your micro, small or freelance business? Find out with this list In our twitter chat with Jennie Moore, we discuss the importance of the cloud in transforming the accountin Michelle Mire.

It changed the tax rates and brackets, revised business expense deductions, increased the standard deduction, removed personal exemptions, increased the child tax credit and limited or discontinued certain deductions. As a result, many taxpayers may need to raise or lower the amount of tax they pay each quarter through the estimated tax system. Canadian small businesses and sole proprietors: The following changes apply to qualifying assets acquired after November 20, Businesses can immediately write off the full cost of machinery and equipment used for the manufacturing and processing of goods.

You may also write off the full cost of specified clean energy equipment. The Accelerated Investment Incentive lets businesses of all sizes in all sectors write off a larger share of the cost of newly acquired assets in the year the investment is made. Of the more than businesses surveyed: 1-in-3 reported spending in excess of 80 hours — 2 full work weeks per year on tax compliance.

Depreciation According to legal advice site, Nolo , depreciation, as it relates to taxes, is a deduction taken in incremental amounts over a number of years. April IRS update. Both will be adjusted for inflation. This rule cannot be used for land, permanent structures attached to land, inventory, patents, copyrights or trademarks, air conditioning or heating units or foreign, leased, inherited or gifted property. You may also not deduct an amount greater than your net taxable income. Canada "Depreciation is broken down over the useful life of an asset to ensure that the cost incurred to obtain that asset is matched to the revenue generated from that same asset.

How to Prepare a Profit and Loss (Income) Statement

Costs of Goods and Services Manufacturers and resellers may capitalize some of the direct and indirect costs of production and resale activities, including raw materials, freight, labor, factory overhead, rent, taxes, purchasing, processing, repackaging, handling and administrative costs. Canada To claim start-up costs you have to be very detailed about the date that you started your business. In order to deduct start-up expenses, you have to prove that they took place during a relevant fiscal period. Moving Expenses Boxes, boxes and more boxes.

It now only applies to military personnel. Canada You may claim moving expenses if you have moved to a new home in order to work or run a new business at a new location. If your office is outside your home, your new home must be at least 40 km from your new place of work. Retirement Plans If you have private retirement plans, your contributions may count as write-offs.

Card Accounts

You are also required to attach receipts as proof of these contributions. Self-Employment Taxes In both the United States and Canada, you are eligible to deduct portions of your mandatory contributions to government programs. Standard Business Expenses A business expense is a cost you incur as part of doing business.

Advertising In both the United States and Canada these costs are deductible. United States You may deduct anything from billboards to business cards, including: All the costs related to the creation and maintenance of your website.

About the Author

Promotional and branded items like key chains, coffee mugs, stress balls, t-shirts, etc. Notable exceptions include political ads. Customers can purchase directly on your site, receive the download and you receive the money. There are a number of services you can use. I've been using e-Junkie. However, it is Paypal or Clickbank only payments and the customer's experience is not that intuitive.

You can also just use a Paypal Buy button on your site, but again, it's not very sophisticated and nowadays, there are options that include email and social integration, as well as analytics. When I decided to sell my books directly from my website, I evaluated the following options:. You should investigate all these as well as any other more recent developments in order to find what fits your business the best.

Personally, I am now using Selz for my ebook and coming soon non-fiction audiobook sales direct from my website. You can see examples on TheCreativePenn. My main reason was that, as a customer, I like to be able to pay by Paypal or bank card, so I wanted both options. I also like the audio and video extras as I think multimedia will become every more crucial in sales.

It also integrates with my Aweber email lists so I can develop a list of buying customers, separate to the list of people who download my free stuff. I'm still using e-Junkie for my courses as that is all set up and works well. Many authors buy and hold their own stock so they can sell signed copies of books from their websites.

Again, you can use Paypal Buy buttons on your site for physical sales as well, but for extended functionality, check out:. I don't focus on physical sales in my business model so I can't share my experience. But if you're going to go ahead with physical sales, please do your research and consider print on demand or drop-shipping, where the product is made and delivered straight to the customer without you having to hold stock.

Otherwise, you will need to pay for stock upfront, hold it or warehouse it, as well as shipping it. Lines at the post office are no fun, and neither is a pile of unsold stock in your house. Trust me, I've made that mistake and made a business decision to focus on digital products primarily because of it. The rise of the indie movement across all industries has seen a renaissance in craft fairs, local markets and people interested in buying directly from the creator.

You may also be a public speaker wanting to sell books at the back of the room. But there are technologies emerging now to suit the small business. These are mainly available in the US and Canada right now, but are spreading globally. If you want to sell directly, or if you want to explore crowdfunding or patronage, you will need an author platform and people who know who you are and are keen to buy.

You will need traffic to your website, and you need an email list so you can tell people when there are books ready to buy.

Author Entrepreneur. How To Sell Books And Products Direct To Customers | The Creative Penn

On 1 Jan, , the EU introduced new VAT tax laws that impact anyone selling digital products to the EU — that includes authors who sell books or courses direct. The tax varies per country and to be compliant, businesses need to collect 2 pieces of evidence proving location. Previously, there was an exemption limit for small businesses but this law gets rid of the limit so anyone selling anything and making any revenue above 0 must pay this VAT. Many of the companies above will help with sorting out this tax information, but many small businesses are pulling down their direct sales — myself included — until the law is revisited for small businesses.

I am intending to create new courses in future but I will likely sell through Udemy or other sites that process the tax for you. I won't be selling direct because of this legislation. For more information, please read this article.