Intrigued by the link?
Here is my logic.
Pink Truth says that Mary Kay is committing (or encouraging) tax fraud.
Pink Truth has no evidence that Mary Kay is committing (or encouraging) tax fraud.
If Pink Truth can do it (accuse Mary Kay of something they have no evidence for), then I will do it as well... simply to point out how ridiculous this is.
Now the question is this,
Should a Mary Kay trip be considered a business expense or a personal expense.
As, no doubt, you will all explain quickly that it depends on a lot of factors and should be determined by your tax professional before making any assumptions, I will simply leave you to describe some ideas that you have had/come across that are good/bad/legit/etc.
I will leave you with this:
Rachel said:
Hmmm... the rules seem to be complicated, but from what I read here http://www.irs.gov/publications/p463/, it sounds like if there is a seminar/convention, its purpose truly is related to your business, and you can show you attended classes/meetings, it counts (for you but not any family you might want to bring.)
While the Mary Kay cruise thing sounds questionable, it sounds like the stuff tps's friends do might very well be okay.
TRACY said:
From the IRS:
Trip Primarily for Personal Reasons
If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. However, you can deduct any expenses you have while at your destination that are directly related to your business.
A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip
I find it quite... what is the word... enlightening I think works... about Tracy's way of thinking.
If you are interested, click the link above and follow Tracy's comments throughout. There is a distinct, "nobody is going to get away with anything that I don't approve of" vibe that comes out.
She has decided that this trip is a personal trip and therefore can't be a business trip and therefore doesn't qualify as a business expense. Since that is how she sees it, that is how it is. So don't question it.
I think this is the issue at the core of what irritates me so much about Pink Truth that I keep this blog going. The internet is a big place, and I am aware of (and am overwhelmed by) the glut of misinformation that exists. But the fact that I can't "protest" all of it does not mean that I can't protest part of it.
So, for my part, I will continue to protest Pink Truth's hideous distortion of the truth. Will they ever recant? Will they ever eliminate the sensational falsehoods they propagate? Will they, failing those things, at least present their site as "fiction" that is based on experiences that happened?
Probably not.
But at least I can say that I did my part.
And all of you can be proud that you were a part of it.
Posts
When I was in MK, my director constantly attempted to mislead me about things that could be used as tax deductions. She even brought in a speaker to the meeting that told us if we went on a vacation and sold one lipstick we could use the whole vacation as a tax deduction. Frankly, I was appalled.
ReplyDeleteI didn't try to do any of those things. They sounded ridiculously illegal to me. Tax evasion is how Al Capone finally got busted...you don't f*ck with the IRS.
But yeah...in my personal experience, Tracy is correct in what she's saying. Certainly happened in my unit.
Now, I have to concur that I have heard many a director especially at a guest event, oversell or exaggerate the tax benefits. My hair curls and I froth at mouth when I hear them babbling on.... Oh, you can write off this, you can write off that, yada.. yada ..yada - now yes, being self employed we have the perk of being able to write off many, many items. However the IRS says they must be reasonable and allowable and there are restrictions. If you use the internet 50% for business and 50% off personal, you legally can only write off the business portion. Taking your husband out for dinner to say thank you for your help putting my bags in the car,, uh no sorry... going on a cruise passing out one business card, no ... however if I go to Dallas for Seminar and visit my friend who live in Dallas while I am there and then staying a couple of extra days to visit - I can still deduct both directions of the plane trip, I just can't deduct the days I stay to visit.
ReplyDeleteIt is also very important to remember that even if it is a deduction, one must still have the cash flow to pay for it.
What bothers me the most is when I hear this it is obvious to me that the director isn't intending to lie, she just doesn't know what in the heck she is talking about.
Probably the biggest pet peeve I have is when I hear someone say that oh, buy inventory it will help you at tax time because it is an expense. Bah... buying inventory is not an "expense", inventory is an asset - period. So again, when I hear directors say that it is wise to buy alot of inventory at the end of the year for the tax advantage because it is a business expense, I have to do everything in my power not to slap them upside the head and say, uh, no, inventory is an asset, it is viewed as money. It is not an expense and actually, the less you have to inventory at the end of the year, makes inventory easier to count and then you can always order after you count your inventory. (Can you tell that bugs me??)
Another point, is product that you use for yourself is not a business expense -
I have heard many of these "misconceptions" but as with anything else, not from every director (fewer than more) and as always, if one goes to MK Intouch - there is everything and more than you would ever want to know in their Tax Essentials section.
I think a lot of people are too overwhelmed/scared of tax laws. They shouldn't be. Knowledge is power. I agree that many of these people are acting in ignorance.
ReplyDeleteI use tax preparation software and usually that is all I need. However, if I have a sticky question, I phone up the IRS and ask them if I can't find the answer on their website. They have customer service ppl who answer the phone to help people with questions.
I think too many people are willing to believe whatever they are told without verifying it, especially if it's something they want to hear.