Tax Organizers
Count Your Inventory!
It's time to count your inventory!
Use a regular order form to help with the count. If you're not using a computer program, you may choose to not count each individual item--just lump all eye shadows together and say you have x number of eye shadows. But, since I use Boulevard, I will count each individual color, so I can update my inventory on my computer, too.It's my understanding that we do not need to include discontinued products in our inventory. So, you don't need to add in your pink compacts, etc. However, by not including them in your inventory, they should be destroyed, given away, or used as hostess gifts, but not sold for income. Check with your tax preparer for more details on this.I find that it is easier to do inventory with help. Ask a friend or young girl down the street (or one of your kids) to help you take inventory. They can write down the totals on the order form while you do the counting.Use the tax organizers to document your deductions.
Over the years we've had various tax organizers to help us document the information we need to take to our tax preparers. I don't know who created these (they came through e-mail last year), but they should be helpful when gathering your information.
My suggestion is to use a tax preparer very familiar with home-based businesses.
Here's one I've used: Vetscher Tax Office
One of the tax strategies I didn't know about when my kids were young was how to pay them deductible wages for all the work they did to help me, such as labeling product, unpacking orders, answering the phone, etc. Definitely check into that deduction if you have kids between the ages of 6 and 18. Please don't ask me to explain it to you, as I don't want to be responsible for giving you tax advice. I won't say anything more about it except to check into it with your accountant. It can be a tremendous savings on taxes for you and doesn't affect children's tax liability either.
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