An Online 2010 Self-Employment Tax Calculator

I found an easy to use 2010 self-employment tax calculator online.

For the Nu Skin distributor:

1) Use the net “business income or loss”entry box (2nd from top).

2) Enter your business income to see the breakdown of the self-employment tax. (losses are not accepted, which means not SE tax payment is required)

3) Select the “Calculate” button.

4) Select “View Report” button.

The view report identified the SE tax you owe and the tax deduction you are allowed to claim.

Note: – I am not a certified tax or financial advisor. I am only providing ideas. You should consult your own personal tax/financial advisor.

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Software Review: MLM Tax Helper

The MLM Tax Helper software is a great tax tool for the Nu Skin distributor.

The software is easy to use.

Info Tab: Provides links to assist you.

Get Started Tab: Customize the software for you (name, tax year, mileage rate, etc…)

Transactions Tab: This is similar to a checkbook in which you date the transaction, identify its payment type, category, description and amount. The Automated mileage to dollar amount is a good feature.

Search Tab: Search for a transaction by date, payment type or category.

I really like the tabs that allows you to see how your business is operating each month, each quarter or each year.

So…what was your net income in the 3rd quarter of last year? Just call it up.

The quarterly statements allows you to know the net income of your small business so that you can pay your self-employment tax based on an accurate dollar amount.

The home office feature is excellent. Just enter the square feet of your house or rental and the size of your office space. Then enter your normal mortgage/rent payment, utilities and any other misc. expenses. The software calculates your quarterly and yearly tax deduction for your home office.

The yearly summary is key aspect for your small business. This allows you to transfer the consolidated year information into your federal and state income tax forms.

Overall, I give the MLM Tax Helper a thumbs up as a tool that can greatly benefit you in operating your Nu Skin distributorship. I urge you to get this software package to avoid “the tax nightmare”.

Note: – I am not a certified tax or financial advisor. I am only providing ideas.  You should consult your own personal tax/financial advisor.

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Are You Ready For Self-Employment (SE) Taxes?

I had to be reminded of this by re-reading the Nu Skin Policies and Procedures. See Chapter 2, Section 2.2. As a self-employed individual, one is responsible for paying self-employment (SE) taxes (even if you are a part-time distributor).

The IRS indicates that SE net earnings greater than $400 are subject to SE taxes. This means that you are responsible for 15.3% of your net earnings (12.4% social security tax plus 2.9% medicare tax).

Note: – I am not a certified tax or financial advisor. I am only providing ideas.  You should consult your own personal tax/financial advisor.

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Tax Help for Your Nu Skin Distributorship

There is a Multi Level Marketing (MLM) tax software program that can manage the income tax aspect our your distributorship.

As a Nu Skin distributor you are operating a business, specifically as an independent contractor (review Nu Skin Policies and Procedures, Chapter 2 section 2). As indicated, you are not an employee or partner with Nu Skin. Distributors  and are liable for federal and state income taxes each year. The IRS provides tax guidelines for operating a small business.

After I received my first commission check I immediately thought about the income tax consequences. Being a first time small business owner I did some research to familiarize myself on the on income tax topic.

The research lead me to some key points in operating a small business.

1) As the owner of the business you must keep proper records of expenses and income. Putting aside your business receipts is a good start, but will be a nightmare for your tax accountant or yourself to build the history of your business expenses for the tax year. Yes, you can pay the tax accountant to sort out the business receipts, but it will cost you money and time.

2) Learn about the tax deductions that are allowed for your small business. From advertising costs (i.e. your business card) to attending conventions (i.e. hotel, air face, meals…). Even the mileage on your car for attending Nu Skin meetings. The IRS provides guidelines on allowable deductible business expenses. The goal is to maximize your tax deductions to offset your income.

3) If your small business is highly profitable, be on the lookout for an underpayment penalty at the end of the year. Many MLM business owners recommend paying your taxes on a quarterly basis to avoid the possible penalty.

4) It’s best to not commingle your personal money account with your small business money account. Open a separate bank account for your small business.

5) I did a quick survey on available tax software that can assist a MLM small business owner. I looked at Quicken Home and Business (very complicated to set up). I thought about using a Microsoft Excel spreadsheet (again complicated and must know what to set up). I finally came upon MLM Tax Helper. This software looks promising and I have ordered a copy (MLM Tax Helper PRO Version). I will write a review on this software package after using it. If you are interested in seeing a demo click on the above link.

Note: – I am not a certified tax or financial advisor. I am only providing ideas.  You should consult your own personal tax/financial advisor.

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