Understanding Tax At-Risk Rules: A Guide for Filing Taxes on TaxAct

[supergirljennie]

I'm filing my own taxes on TaxAct, but I have no idea how to answer this question:

Since there is a net loss for this business, indicate if all the investment is at risk or if some investment is not at risk.

All investment is at risk
Some investment is not at risk
Not Applicable

Anybody know how to answer this? Help would be appreciated!

 

[CAmomCookin4U]

Bumping up

I'm filing my own taxes on TaxAct, but I have no idea how to answer this question:

Since there is a net loss for this business, indicate if all the investment is at risk or if some investment is not at risk.

All investment is at risk
Some investment is not at risk
Not Applicable

Anybody know how to answer this? Help would be appreciated!

EEW I saw that too and was also Stuck.

 

[supergirljennie]

I'm reading some more, and it says investments are at risk if you invested cash in them...

Which I did, right? I purchased them with my own money...

Someone who knows better will explain it to me, right?!

 

[supergirljennie]

If anyone else wanted to know, my director told me to choose N/A. Hope that helps someone!

 

[fruit76loop]

You need to choose AT RISK. Because all of your investment is at risk of being lost if your business does not make it.

 

[supergirljennie]

You need to choose AT RISK. Because all of your investment is at risk of being lost if your business does not make it.

Did a CPA tell you this? I'm not trying to sound rude, so forgive me if I do.

My director said it's because if we lose our businesses, you still have your products. Is that incorrect?

 

[fruit76loop]

Yes a CPA told me this. Actually it was Kathy Yellets', Senior Director, husband who did a tax phone class. And that was one of the first items he told us.

 

[supergirljennie]

Yes a CPA told me this. Actually it was Kathy Yellets', Senior Director, husband who did a tax phone class. And that was one of the first items he told us.

Thanks so much then, for the information. I'll pass it on to my director so we can share with her downline!

 

[jrstephens]

I'm filing my own taxes on TaxAct, but I have no idea how to answer this question:
QUOTE]

I am using Taxact too. Where do you put your expenses in? Did you put products you had bought in a separate place are all together? I cannot decide where to put what.

 

[supergirljennie]

I'm filing my own taxes on TaxAct, but I have no idea how to answer this question:
QUOTE]

I am using Taxact too. Where do you put your expenses in? Did you put products you had bought in a separate place are all together? I cannot decide where to put what.

The expense catagories they have are (that I used):

Advertising (This is where I put purchases from VIP and my website, but also ads in papers, things like that)

Under office expense, sub catagory Supplies (Where I put my filing cabinet, paper, pens, lap boards, my flash drive, etc as well as my supply orders)

Under insurance, sub catagory Insurance (other than health) (this is where I put our demo insurance)

Then there are write in spots for Other Expenses

The catagories I used are:
Consultant Gifts
Food purchases (for shows and practice)
Products (including my kit, enhancement purchases, samples)
Postage

That's what I have done! I hope that helps!

 

[jrstephens]

Thanks Jennie it helps a lot!!! I have got to get to adding my expenses up b/c right now I am OWING money and my husband is not going to be please. BUT I have not entered my expenses yet.

Do you write off part of your utilities for a home office?

 

[fruit76loop]

The expense catagories they have are (that I used):

Advertising (This is where I put purchases from VIP and my website, but also ads in papers, things like that)

Under office expense, sub catagory Supplies (Where I put my filing cabinet, paper, pens, lap boards, my flash drive, etc as well as my supply orders)

Under insurance, sub catagory Insurance (other than health) (this is where I put our demo insurance)

Then there are write in spots for Other Expenses

The catagories I used are:
Consultant Gifts
Food purchases (for shows and practice)
Products (including my kit, enhancement purchases, samples)
Postage

That's what I have done! I hope that helps!

What are you including in your consultant gifts? I just ask because the first year I had my CPA do the taxes she suggested I do things differently. Tax law on gifts is very strict about it being limited to $25 per person per year. so, if you have a repeat host and she had a $1000 show so you gave her a large round stone...you can only write off $25 of that. Then if she hosts again that same year, you can't write off any gifts you give her. But if you catagorize it as incentives, then they are unlimited. The difference between incentives and gifts is easily determined...Did you offer something to make more of your business? Then it is an incentive. I have very few gifts in my expenses. I have a team members flowers for her new baby, my cluster Christmas gifts and my director's Christmas gift. Thats it for gifts for me!

 

[Jennie4PC]

Do you write off part of your utilities for a home office?[/QUOTE]


I dont say that I have a home office because I dont use my office just for PC I talked to someone who does taxes and she said that if I got audited I would hae to remoe everything out of my office that was not PC related