way too tired for this

[joanmcq]

Call up new client who has MLM biz (losing money, of course, although she does have sales). She has one expense listed for XYZ Co. expense. So I called her up to ask, how much of the goods purchased were a) sold, b) samples, promos, etc or c) personal use. I also said in the charges were for stuff like 'upgrade to new level'.

"Oh, all of it is for the chocolate". I explain COGS and how the expenses need to be broken down into the three (or maybe more) categories.

"But all of it is business expenses. I need to be a testimonial to how great this stuff is". Sorry, doesn't work that way. Personal is personal. Explain how a Mary Kay rep can't deduct the makeup she herself uses, no matter how good she has to look while selling the stuff.

"I'm going to call a tax person I know who does these kind of sales and get back to you".

It's too late in the game for this kind of stuff.

[JohnH]

Want to bet that she will get back to you with a request that you contact the other tax exper and "work it out"?

[Bonnie]

Yea my Mary Kay customer this week wanted to deduct her manicures cause her nails have to look good for her business. I just told her she couldn't but was thinking, if you're going to the nail salon for a manicure then you're not even using your Mary Kay product.

[joanmcq]

Hah! I have a colleague (EA) who does classes for MLM biz people on how to keep records, what is deductible, and how to make the biz profitable. I'll send the client to her. Now I don't think MJ does RDP returns, however, so might be an issue. But MJ would straighten her out.