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If you are an independent direct selling consultant and have been paid at least $600 during the year, the company has to file a Form 1099-MISC with the Internal Revenue Service to report payments for services performed in your business. The company will also send you a copy of this 1099-MISC to report how much the company paid you that year.
Due to the COVID-19 outbreak, the tax filing and payment deadline has been extended until July 15. Click here for more information.
While filing your regular individual tax return (typically a Form 1040) you will have to complete a Schedule C “Profit or Loss from Business” where you will enter all income and expenses from your direct selling business.
A home office deduction is available for direct sellers using their homes for business.
Self-employed individuals can also claim a health insurance deduction for medical, dental or long-term care insurance premiums that self-employed people pay for themselves.
The Earned Income Tax Credit (EITC) is a credit for people who earn low-to-moderate incomes. Earned income includes all taxable wages you get from working for someone who pays you or from working in a business on your own.
DSA worked closely with the Internal Revenue Service (IRS) to prepare an Audit Technique Guide (ATG). The ATG will be used by IRS examiners and auditors when reviewing direct selling returns. The ATG can be found here.
Direct sellers can view brochures from the IRS for additional information.
Gig Economy Tax Center: Information on reporting income earned from the gig economy.
Publication 4591: Small Business Tax Responsibilities
Publication 3995: Avoiding Illegal Tax Avoidance Schemes
IR-2018-197: IRS to highlight tax reform changes affecting small businesses; Small business owners, self-employed should plan now for new changes
FS-2018-17: The Highlights of Tax Reform for Businesses
For any other questions, visit the IRS Small Business and Self Employed Tax Center.
© 2013 Direct Selling Association. All Rights Reserved. This copyrighted content may not be disseminated or reproduced in any form without express written consent and without full attribution.
A special thank you to DSA’s 2024 START Summit and ENGAGE Conference Series sponsors for their generous support.
Infotrax
Jenkon
multibrain
ADI
Amway
Exigo
GoBi
MomentumFactor
NuSkin
PayPal
Payquicker
Rallyware
WinstonStrawn
4Life
Avalara
BakerHostetler
Disney-Meetings
Foley
Hussle
Integrishield
Kelley-Drye
Nexio
PRO-Insurance
Quickbox
S4DS
smart-office-solutions
Staci Americas
Sunwest
USANA
Worldpay
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