Danielle and Jason Baker LLC - Paparazzi Independent Consultant 129930
Becoming a Paparazzi Consultant opens new realms of possibility: instant cash profit, lifelong friendships, and the chance to make a difference in the lives of your customers and team members. But becoming a business owner can also take you into unfamiliar territory. While these new horizons are often opportunities for personal and professional growth, there are some aspects of business ownership that strike fear in the heart of any new Consultant. One of the most commonly misunderstood and dreaded realities of operating a small business is the matter of taxes – especially at this time of year. As talk of tax returns, write offs, and the IRS increases, so does the level of confusion. To help you keep it straight, we wanted to take the opportunity to share the distinct differences between income taxes and sales taxes and what they mean to you as a Consultant.
P&P 4.2 - Income Taxes: "As an independent contractor, Independent Consultants will receive an IRS Form 1099 (Non-Employee Compensation) earnings statement if they are a U.S. resident that has earnings of over $600 or more through the Compensation Plan paid from Paparazzi in the previous calendar year. The Independent Consultant is solely responsible for paying local, state, and federal taxes on any income generated as an Independent Consultant. A copy of all IRS Form 1099s that are generated as a result of the criteria above will be remitted and sent to the United States Internal Revenue Service for the applicable tax year. If at any point the Federal Tax Information (name, SSN, EIN, etc.) provided by the Independent Consultant is wrong or contains an error, Paparazzi may hold all future earnings until the error is rectified within Paparazzi’s records and the correction is remitted to the IRS; in these circumstances, pending the severity of error, the Consultant may be subject to be liable for any fines incurred by excessive errors submitted to the IRS." Some business owners opt to pay these quarterly instead of annually. Your tax adviser can help you determine the best way to remit your income taxes properly. They issue 1099s in January, if you are to get one from Paparazzi.
P&P 8.3 - Sales Tax: "In states where the Paparazzi products are subject to sales tax, the Consultant is charged for the sales tax at the full Retail Sales amount at the time of the wholesale purchase of inventory. This is intended to ensure that each state tax agency is made whole on any potential sales from the transactions of that wholesale product. Paparazzi collects these taxes at the time of wholesale inventory purchase and remits it to the state on behalf of the retail sale that the Consultant may now have. The sales tax is charged at the local level of the location where the order is shipped. Paparazzi also collects retail sales tax (based on shipping location) from customers that order online from the Paparazzi website. This also allows the Paparazzi Consultant the option of charging their local taxes on their Customer transactions and recuperate that cost, or absorbing it into their business structure; while at the same time not bringing any uncovered sales tax liability on Paparazzi or the Consultant. Paparazzi is required to remit sales tax this way."
In other words:
By Tracey Reid
How To Do Your Paparazzi Taxes- Advice from Michelle Johnnie's CPA Matt Jensen (our CPA) and me as we talk about home based business tax.
If you would like Matt to do your taxes, you can contact him with the info below. DO NOT CONTACT HIM and ask his questions if you have NOT watched the video. Matt Jensen CPA, CVA Cook Martin Poulson P.C. 435-750-5566 email@example.com