Comments on: MARY KAY: Business or Hobby? What the IRS Thinks… http://www.everyjoe.com/articles/mary-kay-business-or-hobby-what-the-irs-thinks/ Sports News - Tech Reviews - Entertainment - Life Tips for EveryJoe Tue, 22 Dec 2009 08:19:14 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: mk4me http://www.everyjoe.com/articles/mary-kay-business-or-hobby-what-the-irs-thinks/comment-page-1/#comment-298086 mk4me Sun, 20 Jul 2008 22:33:57 +0000 http://www.franchisepick.com/mary-kay-business-or-hobby-what-the-irs-thinks/#comment-298086 The same rules apply to any small business, sole ownership, not just direct sales, I am sure that many get carried aways with what they try to take as expenses. The IRS allows "reasonable" expenses, if you start a MK business and go out and charge office furniture, copiers, computers, hire an assistant, etc... and don't do more than take a few orders a year, and do the same, year after year, I would hope IRS would have a problem with it. If any business shows a loss but the expenses are in line with the profits, the IRS can still allow it. And a very common mistake is inventory is not a business expense. Inventory is an assest. With many of the common mistakes made, it is highly possible that Brenda Konchar's expenses were so out of line, that the IRS had every reason to disallow them. Are we able to see a copy of her Schedule C that she filed for those years? The same rules apply to any small business, sole ownership, not just direct sales, I am sure that many get carried aways with what they try to take as expenses. The IRS allows “reasonable” expenses, if you start a MK business and go out and charge office furniture, copiers, computers, hire an assistant, etc… and don’t do more than take a few orders a year, and do the same, year after year, I would hope IRS would have a problem with it.

If any business shows a loss but the expenses are in line with the profits, the IRS can still allow it.

And a very common mistake is inventory is not a business expense. Inventory is an assest. With many of the common mistakes made, it is highly possible that Brenda Konchar’s expenses were so out of line, that the IRS had every reason to disallow them. Are we able to see a copy of her Schedule C that she filed for those years?

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