Think Green!
March 17, 2014
Why is it important for you as a business owner to track income and expenses?
Have the ability to write off
eligible expenses
Maximize tax deductions
Help you run your
business more efficiently
More time to focus on sales and
building your business
Plan and budget
Learn how to allocate
your money each year
Tips for Recording Income and Expenses
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Set up a separate checking, savings and credit card account for your business.
Use an accordion file to label and file your receipts. Organize them by date or category.
Keep all business-related receipts and write brief notes on receipt (e.g. what purchase was for, who meal
was with, etc.)
Use a software program (like QuickBooks, Microsoft Money or Peachtree) or Dome Weekly Bookkeeping
Record Book to track your sales, expenses and inventory
Keep a mileage log book for business-related trips. Write down the date, beginning and ending mileage,
and purpose of trip.
QuickBooks
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Great and easy way to track your financial transactions
o Your checking, savings and credit cards accounts can be set up on QuickBooks which gives you the
ability to track all your income and expenses
o By using QuickBooks and reconciling your checking, savings and/or credit card accounts, you
won’t miss any expenses
Easier for your accountant to do your taxes if your financial transactions are in QuickBooks (which means
saving money on accountant fees)
Cost of software is $250 (www.quickbooks.intuit.com)
Income
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Arbonne will send you a 1099 form if your OVERRIDES AND BONUSES ARE OVER $600 yearly.
When making a retail sale, you receive immediate profits and also pay sales tax at the time of purchase.
Keep records of any profits you make from retail sales for tax purposes.
Keep track of product inventory.
Keep track of returns and allowances as well as customer refunds.
Expenses – Sample of Arbonne Expense Categories
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Advertising
Auto Expense (Gas, Parts & Service, Car insurance, Car loan interest)
o Keep a mileage log book for business-related trips and write down the date, beginning and ending
mileage, and purpose of trip.
o Your accountant can help you determine if it’s better for you at tax time to take total mileage x
standard rate/mile or to take all auto expenses (gas, parts & service, car insurance, etc.)
Business Tools and Materials (Starter Kit/Open for Now for Business pack, initial product order,
prospecting packet materials, samples, catalogs)
Charity
Computer Expenses
Conferences
Depreciation Expense (business use of purchases such as desk, copier, fax machine, computer, etc)
Gifts
Internet Expenses
IRA/SEPP (savings for retirement)
Licenses and Permits
Meals and Entertainment (typically 50% deductible when discussing Arbonne business)
Meetings and Events
Office Supplies (paper, stapler, folders, mailing envelopes, etc.)
Postage and Delivery
Printing and Reproduction
Professional Development (books, Learn & Burns, subscriptions to magazines, CDs/DVDs for education &
training)
Professional Fees (Accounting, Legal, Payroll, Website Services)
Promotions (Hostess, Customer, Team)
Telephone Expense
Travel (Airfare, Lodging, Rental Cars, Cab fare, Meals, Parking)
Other Expenses for Dedicated Home Office
(Ask your accountant to help you determine any home office deductions.)
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Property tax paid, Homeowner’s insurance, Gas and electric, Mortgage interest, Repairs to home
Types of Business Entities – Information from U.S. Small Business Administration (www.sba.gov)
1. Sole Proprietor
 You do not have to take any formal action to form a sole proprietorship.
 You need to obtain the necessary licenses and permits. Regulations vary by industry, state and
locality.
 Because you and your business are one and the same, the business itself is not taxed separatelythe sole proprietorship income is your income. You report income and/or losses and expenses
with a Schedule C and the standard Form 1040.
 It’s your responsibility to withhold and pay all income taxes, including selfemployment and estimated taxes.
2. Limited Liability Corporation (LLC)
 In order to form an LLC, you need to choose a business name, file articles of incorporation, create
an operating agreement and obtain business licenses and permits.
 Unlike shareholders in a corporation, LLCs are not taxed as a separate business entity. Instead, all
profits and losses are "passed through" the business to each member of the LLC.
 All federal income taxes are passed on to the LLC's members and are paid through their personal
income tax.
 Members are protected from personal liability for business decisions or actions of the LLC. This
means that if the LLC incurs debt or is sued, members' personal assets are usually exempt.
 Members of an LLC are considered self-employed and must pay the self-employment tax
contributions towards Medicare and Social Security. The entire net income of the LLC is subject to
this tax.
3. S-Corporation
 An S corp is a corporation with the Subchapter S designation from the IRS.
 What makes the S corp different from a traditional corporation (C corp) is that profits and losses
can pass through to your personal tax return. Consequently, the business is not taxed itself. Only
the shareholders are taxed.
 One of the best features of the S Corp is the tax savings for you and your business. While
members of an LLC are subject to employment tax on the entire net income of the business, only
the wages of the S Corp shareholder who is an employee are subject to employment tax. The
remaining income is paid to the owner as a "distribution," which is taxed at a lower rate, if at all.
 Any shareholder who works for the company must pay him or herself "reasonable
compensation." Basically, the shareholder must be paid fair market value, or the IRS might
reclassify any additional corporate earnings as "wages."