TAX FACTS

From: Barbara Ashworth
Great year end tax tips.  Here's another one - once you've taken your year end inventory, log onto www.marykayintouch.com and use the ordering program to tally it.   The computer will total your products for you.  All you'll have to add is anything not on the current order form and you'll have an exact total of what you have!  It is not necessary to count each color - for example, you only need to know the number of lipsticks you have, not each individual color so you could put all of them on the order form as the same color.  Your accountant is not interested in how many Sagewoods you have, on the total value.
Happy Year End!
Debra

Great tips for Taxes at Year End! 
I wrote this article several  years ago and I see it everywhere.... on director websites, and as emails!  Apparently it is pretty good!  Be sure and read it through and get some of this done this week!

Its that time of year . . . time to get organized!!  This can be a challenge for some of us as Mary Kay Consultants . . . we tend to be people people . . . not paper people!  The great news is its easy to get your paperwork in order once you know what to do. 

Below are some suggestions to help get you off to a good start in the year 2004!  Remember though, I am NOT a CPA!  Things change from year to year!  This is meant as a guideline of information to take to your tax person! Let me recommend that you be as choosy with your tax accountant as you would be with your pediatrician!  Mary Kay is a unique business and its important to use someone who is familiar with our business and can help you to have the best results at tax time. 


Suggestions:
*  Take inventory of the retail product you have on hand on December 31st.  I find the easiest way to do this is to take a current order form and list the total number of products in the quantity box.  Its not necessary to separate every cleanser, lipstick, nail color, etc.  It doesnt matter how many colors of each individual item you have.  You just need a total.  For example . . . just count the total number of foundations, no matter what shade, and indicate the total.  As for limited edition products that are not listed on the current order sheet, you need to determine if you still plan to try to sell them or if you are going to use them as hostess gifts or giveaways.  If you plan to sell them, you need to count them in your inventory.  If you plan to use them as giveaways, dont include them in your inventory total. 

*  Remember, anything you purchase FOR YOUR BUSINESS on or before December 31st will be counted on your 2003 tax return.

* If you owe anyone any merchandise or if anyone owes you merchandise, get it  straightened out now!  Borrowing and lending is a no-no!  It is just not professional.  We all run short of something from time to time, and an occasional trade is OK, but if you are trading for basics, you dont have enough inventory!  Make the necessary arrangements to get what you need on your shelf (bank loan, credit card, family loan, etc.).

*  Be sure all your Weekly Accomplishment Sheets are up-to-date!  This is YOUR  record of your sales!  .  (Did you know that your summary sheet is the verification you need for the IRS for your sales if you were ever audited?) Its a good idea to make sure I have a record of them as well, so make sure you are turning them in weekly.  Its also the only way you get recognized at our weekly Success Meetings and in the monthly Newsletter!

*   Be sure you have a record of your ending mileage on December 31st.  If you forgot to take it last January, then estimate what it was on January 1, 2003 (or when you began your business this year if you are a new consultant).  Put the beginning and ending mileage at the top of the order form you are using to list your inventory.  Be sure you are recording your mileage every time you are doing Mary Kay business (Meetings, Classes, deliveries, etc).  It adds up fast!  If you forgot to record mileage this year, go back through your datebook and estimate the miles driven for each appointment.

*   Gather up all your receipts for 2003.  Hopefully, youve already separated them intotopics folder.  If not, spend a little time each week getting them in order so youll them finished well before April 15th.  Then get set for 2004 by setting up an easy system.
    a.)  Buy an accordion file folder with a large number of pockets (either A-Z or 1-31).  Put folder labels over each tab and on that tab, put the category. You might not even know what categories to list yet, but you will figure it out as you have receipts.  Each day, drop your receipts in the appropriate pocket and at the end of the year  take a category out, add them all together, staple them together and put in one large manila envelope.  On the outside, list the categories and the total amounts for each.  Dont forget the retail sales category!  All your summaries for the month go in 40/60 envelope also.
    b*   Establish a file for all of your 2003 records.  When your 1099 form comes from the company or any other W-2s arrive, youll have a place to put them.

*   Be sure that you have kept a record of these 3 things:
    a)  Personal use product that you or your family are taking off your shelf each month. 
    b) Section 1 Retail products that you are giving away for hostess gifts, birthday gifts, door prizes, etc.  Ive found the easiest way to record these is to keep a sales ticket for each of these categories each month and list the items Im using or giving away.  Your accountant needs these totals to figure your cost of goods sold and the non-recovered sales tax.
c.) all procducts that you opened for full size display - satin hands etc

I hope you all had a blessed Christmas! Love, Barbara