Comments on: Rethink Pink: Mary Kay May be a Hobby, Not a Business

By: James

James — Fri, 27 Jan 2012 17:13:01 +0000

Hello Taxgirl, my wife is in a similar situation as Lauren (who posted on your website in Feb. 2010) . My wife wanted to make some extra money after quiting her job in Fla to move to S.C. because we got married. We spent nearly $2,000 in all the initial start-up and operating costs. (They included a basic MK inventory of merchandise, the associate website, the product samples, business cards, attending weekly meetings, she even traveled back to Florida from S.C. to host 2 parties. etc) In the end I think she was able to sell $600 worth of products. I pushed her to get a job as a waitress and earn real money. But what about the $1,400 loss we have. She wants to sell MK, but I say No way.

By: Run With It: Sports, Races and Taxes | taxgirl

Run With It: Sports, Races and Taxes | taxgirl — Mon, 12 Dec 2011 19:51:09 +0000

[...] How can you tell if running is a hobby or a business for you? The IRS looks at a number of factors. First of all, the IRS assumes that you’re in business to make money. There’s nothing that says that you can’t enjoy your business, but if you’re running primarily because you like it and not to make money as your main motive, it’s likely a hobby. Additionally, the IRS assumes that a business will eventually make a profit. If you spend more than you make year after year, the IRS is going to lean hobby – especially if you’ve lost money for three of the past five years. For more on the hobby rules, see my prior post about hobby income tests and Mary Kay. [...]

By: Run With It: Sports, Races and Taxes - Forbes

Run With It: Sports, Races and Taxes - Forbes — Wed, 26 Oct 2011 03:06:19 +0000

By: Run With It: Sports, Races and Taxes - Forbes

Run With It: Sports, Races and Taxes - Forbes — Wed, 26 Oct 2011 03:06:19 +0000

By: Ask the taxgirl: Am I Blogging as a Business or a Hobbyist? | taxgirl

Ask the taxgirl: Am I Blogging as a Business or a Hobbyist? | taxgirl — Wed, 10 Feb 2010 21:12:53 +0000

[...] of all, the Mary Kay post that you’re referring to is here. In that post, I included a list of factors that the IRS considers when determining whether [...]

By: Lauren

Lauren — Wed, 03 Feb 2010 20:08:59 +0000

I became a MK consultant this year. I never had the intention to make money off the business. I enjoyed the products my self and wanted to save money and a friend needed to build out her team.

Even though I didn’t plan to use MK as a business, I ended up buying extra product at the beginning because they had incentives to buy X amount of product when starting. Now most of that extra product has been sitting in my closet since March.

I only made 3 or 4 orders this year basically enough to keep me active. I used a good bit of it for myself and “sold” some to family and friends at cost. I never received any profit. I would like to continue this, but I do not want to run into problems with the IRS. I’m just starting to research how to report this on my taxes this year. Do you have any advice? MK consultants tell me to write off my remaining inventory? Can I do that without raising red flags? I haven’t received any tax forms from MK, but I have read that they only send 1099s if your orders exceeded $5,000 wholesale. I think my wholesale orders were around $1,000-1,500.

Any advice would be appreciated.

Thanks,
Lauren

By: Kelly

Kelly — Wed, 04 Nov 2009 00:11:59 +0000

Thanks Kessy – you can always sign up to receive posts via email or in your reader. Check the subscribe box in the top right of the blog.

By: Kessy

Kessy — Tue, 03 Nov 2009 23:03:28 +0000

I too am a MaryKay “hobbiest” for the last three years and heard similar advice from my tax preparer last year. This was a better explanation. I would gladly return to this website to learn more on taxes.

Please send updates and newsletters if available to the above email address.
Thank you.

By: Andrew Johnson

Andrew Johnson — Mon, 19 Jan 2009 04:05:53 +0000

Awesome site and great post, very helpful thank you!

By: Ask the taxgirl: Running As Fast As I Can | taxgirl

Ask the taxgirl: Running As Fast As I Can | taxgirl — Tue, 13 Jan 2009 13:27:40 +0000

[...] How can you tell if running is a hobby or a business for you? The IRS looks at a number of factors. In this case, there are two big factors which likely make running a hobby for you: your motive and your winnings. The IRS assumes that you’re in business to make money. It sounds, from your post, as if you run because you enjoy it and not to make money. There’s nothing that says that you can’t enjoy your business, but if you’re running primarily because you like it and not to make money as your main motive, it’s likely a hobby. Additionally, I’m guessing that you haven’t grossed more than you’ve spent for most of the last five years – the IRS assumes that a business will eventually make a profit. For more on the hobby rules, see my prior post about hobby income tests and Mary Kay. [...]