If you are an Herbalife distributor, do not let people tell you that you will not have to pay taxes. Although the IRS thinks that a Herbalife distributor is a sole proprietor, you are still responsible for taxes. This means that you have income that has to be reported and taxed. Many people see this as a negative thing. But you should not let taxes make things hard for you. This article will provide a few tips for the Herbalife distributor who wants to get a handle on their taxes.
Yes, as a Herbalife distributor you are responsible for paying taxes. Anybody who told you otherwise is lying! The Internal Revenue Service will know about everything that you do. If the IRS believes that you have the incorrect income reported, then they will come after you with an audit. But, do not get stressed about this. If you do not lie about your income and expenses, then you should be fine. And, if you pay the proper amount of taxes every year. This probably sounds intimidating but it doesn’t have to be. These tax tips can help you in the long run.
Make payments toward your taxes throughout the year.
These tax payments are based on an estimation of what you would be claiming. If you chose this option before, you were required to send them in quarterly. Now there is no prescribed time demanding a payment. Double check this with an IRS agent and make sure that you keep track of all of these payments because they will be important when you fill out your annual taxes. If you’ve overpaid, you’ll get a refund!
Be mindful of the three out of five rule.
The IRS has given names to three types of marketers, these are freelancers, entrepreneurs and sole proprietors - which you can all use about the Herbalife distributor - and the general feeling of the IRS is that these people will probably make money no less than three out of each five years they are in business on the internet. If you rarely show a profit, the IRS will be wondering why you are staying in business when you are not making money. As long as you are being honest and precise when you file, all will be well and the IRS will not find anything to take action on. It is not a good idea to try and be sneaky when reporting your income; you may face a very negative penalty as a result.
If an accountant is an option, take the time to get recommendations from a fellow Herbalife distributor that can steer you in the right direction. You need to be ever vigilant about who you do business with because you never know when you are in the sights of the criminal element. You would be wise to hire someone who comes with unwavering credentials and has worked with this type of business prior. By doing this you will be able to feel a little more secure about your standing with the IRS.
Only your can make the tax season scarier than what it has to be. You can get through this if you do not procrastinate and keep good records. The more that you know about how to do your taxes properly, the less scarier the process will be. If you are really scared, then contact the IRS. The people there will help you get through the difficult tax season.
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