Business Deductions help

[b4u2]

I am a Beachbody Coach and trying to understand how/what I can deduct and what to call my expenses. I know I will use sch C.
I am not sure what the business code is.

Being self employed has MANY tax benefits.  For instance, with your own business, you deduct your business expenses.  When you're a BeachBody Coach, you have to be a product of the product.  That makes your workouts, shakes, workout gear, tv to watch your workouts on, gas mileage to buy the stuff, cups to drink shakes from, workout shoes, utilities to run your business, office space, ect. tax deductible.  Am I making sense yet?  You don't get these kind of tax deductions when you work for someone else!

As a BeachBody Coach, you can take a monthly personal expense like Shakeology and make it a business expense that is tax deductible.  And, to successfully track your expenses, you have to keep track of them in your office space.  So, if you're doing P90X and Shakeology, it's in your best interests to sign up as a coach vs. using it as a customer.  1. you're getting it at a discounted rate and 2. you're able to deduct that amount as a business expense.

So trying to figure out where and what to call these different deductions.
 

[FIence!]

Being self employed has MANY tax benefits. 
You don't get these kind of tax deductions when you work for someone else!

I would be careful with this line of thinking. You get many deductions, but to say these are "tax benefits" might be stretching things if you are in the black. I know a lot of people with really low profit get creative with their write offs, but if you are profitable you are most likely paying much more in total taxes as a percentage of income as a self-employed person. For example, you have to pay ALL of your own self employment tax, whereas W2 employees get some of their medicare/social security taxes covered by the employer. I have always paid more tax (as a percentage of income) being self-employed than when I had a employer, even with identical AGI.

[b4u2]

All I had were losses last year. I started doing this in May.

[Ravenplay]

You can find a lot of help with business deductions categories online. You should, of course, be tracking all of your expenses in a financial program of some kind -- Quicken, Quickbooks, Mint, iBank. Those programs already have tax-related categories built in, and you can tweak the names if you need to.

The IRS Schedule C instructions has a lot of detail: http://www.irs.gov/pub/irs-pdf/i1040sc.pdf

and here's a blog post from 2009 that might be helpful: http://caps.fool.com/Blogs/schedule-c-what-expenses-go/171890

From the types of things you list, it seems you can be using categories such as Equipment (durable items, e.g the TV -- although this might be an asset you want to depreciate over time instead), Office supplies (basically items that get used up), Education (training courses you've taken), mileage (one method is to track business miles as well as the total mileage one your vehicle for the year), meals and entertainment (meals where you conduct business), also postage and delivery, advertising, internet and phone services, other professional services, licenses (e.g. your business license) printing and reproduction, etc. You may not be able to deduct items like clothing or food unless it is very specific to your business and only used for your business -- ask a tax expert on that one. You can also get free advice from the IRS -- I've found their folks quite helpful in the past.

If you use Turbotax or another tax preparation software, it should walk you through many of the types of deductions that you can claim. Hope this helps.

[tat96]

Watch the office space deduction as it just changed and it is low hanging fruit for an audit.  If you are running a business out of your house beware!!  Read up on the most recent rules. 

Also, be cautious about deducting workout clothing as the rules for "work related expenses" such as clothing have a lot of room for misinterpretation.  "Work out" clothing and shoes are probably not deductible as they are "suitable for every day wear". 

Here is a link to the IRS page dealing with business deductions:

http://www.irs.gov/publications/p529/ar02.html#en_US_2013_publink100026912

Lastly, if you have not made a lot of money this year and are looking at a loss research tax loss carryovers into future years.  This is a huge benefit for businesses as the government understands you are probably not going to be an instant success!!

[foobar]

I would talk to an accountant about this.  Things like workout clothes are probably not deductible (google it. Lawyers can't deduct their suits for example) and shakes and the like are probably stretching it. That TV is fine but it better not be in a place where your family uses it for anything other than the business and so on. If it is an expense you would have had without the business you get into a really gray area when you try and deduct it.

I am a Beachbody Coach and trying to understand how/what I can deduct and what to call my expenses. I know I will use sch C.
I am not sure what the business code is.

Being self employed has MANY tax benefits.  For instance, with your own business, you deduct your business expenses.  When you're a BeachBody Coach, you have to be a product of the product.  That makes your workouts, shakes, workout gear, tv to watch your workouts on, gas mileage to buy the stuff, cups to drink shakes from, workout shoes, utilities to run your business, office space, ect. tax deductible.  Am I making sense yet?  You don't get these kind of tax deductions when you work for someone else!

As a BeachBody Coach, you can take a monthly personal expense like Shakeology and make it a business expense that is tax deductible.  And, to successfully track your expenses, you have to keep track of them in your office space.  So, if you're doing P90X and Shakeology, it's in your best interests to sign up as a coach vs. using it as a customer.  1. you're getting it at a discounted rate and 2. you're able to deduct that amount as a business expense.

So trying to figure out where and what to call these different deductions.

[b4u2]

Thanks for the tips!

I am not sure if I will deduct the house. I have read that can cause some problems down the road with resale. I am not worried about the workout clothes, I didn't buy any from Beachbody to promote my business.

The tv, dvd, sound system is only used for the workout area. I bought a few things for the workout area (flooring, weight bench, bands, misc). I will look at the rules carefully.

Since I heat the garage I will figure out the square footage and figure that for the utilities.

Cell phone and internet are my main business avenues (social media)

No meals or mileage since I didn't go on any trips this year.

I did buy postage.

I did buy promotional items to give away.

I did buy educational books.

Slowly figuring this out.

[Numbers Man]

Sounds like there is a big learning curve ahead based on your questions and responses. Therefore, I would suggest you let a tax pro take you through the first year and ask lots of questions. Then decide if you're able to do your own taxes in subsequent years.

[foobar]

Writing off heat an utilities causes the same problems as deducting the house. When you go to sell, some chunk of that money that you claimed will be recaptured (google section 1250). And here is the really fun part. Let say you don't claim this deduction because it is too much work for not enough cash. Guess what? When you go to sell, you will owe the tax even though you didn't claim the deduction. Here is one article about it http://sherayzenlaw.com/home-office-expense-and-unrecaptured-section-1250-gain/

Thanks for the tips!

I am not sure if I will deduct the house. I have read that can cause some problems down the road with resale. I am not worried about the workout clothes, I didn't buy any from Beachbody to promote my business.

The tv, dvd, sound system is only used for the workout area. I bought a few things for the workout area (flooring, weight bench, bands, misc). I will look at the rules carefully.

Since I heat the garage I will figure out the square footage and figure that for the utilities.

Cell phone and internet are my main business avenues (social media)

No meals or mileage since I didn't go on any trips this year.

I did buy postage.

I did buy promotional items to give away.

I did buy educational books.

Slowly figuring this out.