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Hi there guys. Welcome to Jami Jo sells wax here on YouTube. I am so glad that you have decided to join me today. Now, today’s topic is the tax benefits of having a side hustle. So we are going to talk about why you should consider having a side hustle as far as your taxes go, and then a couple tips and tricks for keeping up with all the record keeping and just preparing for tax season. Hi guys, my name is Jami Jo and I am a s Scentsy consultant. I’m actually a superstar director within Scentsy. Now, I know that sounds like a completely made up title, but trust me, um, it is the top level of the company. I have been working with s Scentsy Fragrance for over 15 years now. I started all the way back in October of 2008 and even before s Scentsy, I had had a couple other side hustles, um, some items that I had just been making and selling myself and working with some other multi-level marketing or direct sales companies.
So I’ve had many, many, many years of experience with a side hustle and how it works into doing taxes. Now, let me first and foremost say I am in no way a tax professional. I am in no way an IRS specialist. So I’m gonna give you some very, very, very, uh, loose advice, but I suggest that you reach out to a tax professional or an accountant around you and talk to them about the specifics if you have any questions about this stuff. Now, like I said, I had been doing many different little side hustles in the past and at one time I had been selling a certain product that has been known for door to door sales way back in the day. And honestly, I just wasn’t making any money at it. Kind of the fun had worn off. And so I decided to quit that side hustle.
So for a year span, I just had my regular job. I did not have anything on the side, um, as, as far as a side hustle is concerned. And when I went to get my taxes done that year, my accountant was like, Hey Jamie, so what are you doing on the side this year? And I was like, oh, I decided it just wasn’t worth it. And he was like, um, you need to find a side hustle and you need to get going again because it is so beneficial on your taxes. All of this being said, I am talking about side hustle, not, I mean, my Scentsy is my career. It is my full-time job. I’m talking about little side hustle things. So let’s dig right into it. Excuse me if you see my eyes cutting down quite a bit. I do have a full page of notes here ’cause I wanted to make sure that I stayed on task and, uh, talked about everything I wanted to share with you guys.
So here’s the thing. Many side hustles or hobbies, and that is a term that can be used interchangeably, but as far as taxes go, they’re very, very different side hustles and hobbies. Many side hustles can be reported as a business loss on your taxes for a limited number of years. Now, if you continue to claim a loss for too long, the IRS is like, look, this is not a legit business. This is just a hobby. So it’s different in every state. Contact your tax professional to find out what that time period is, but you can claim a business loss for i, I don’t know whether to say several years or a limited number of years. ’cause those terms can be used very loosely. That is a benefit to you on your taxes because you are attempting a job, attempting to make money, and on paper it is a loss.
Now, I know that direct sales and multi-level marketing can get a very negative spin for forcing you to spend money to be a part of their company. Scentsy in no way forces anyone to spend money, but chances are, if you are really working your business and really doing it right, that you are going to spend some money. Also, there are things in our day-to-Day life. If you have a side hustle, they can be marked as a business expense. And I’m gonna go through the list of suggested write-off items. The thing that you need to know is what type of side hustle do you have? Are you working for a company like Scentsy will send its consultants a 10 99 if they have received $600 in commission or more. So depending on what your side hustle is, the reporting of it might be a little bit different.
Now, the IRS states that anyone making 400 or more in net income from a side hustle must file taxes. Gross income and net income are very, very different. So Scentsy sends a 10 99 to me and all their consultants for the gross amount of money that they have given me, whether that be in commissions, in bonuses, in the value of incentives, whatever it is, they’re gonna send me the 10 99 of the gross amount. The net is that big gross amount, number minus the expenses. And that is really where this becomes a benefit to you as far as the write-offs that you get to use for your business. It kind of makes me laugh if you’re a Creek fan, there is a hilarious scene in there where David has no idea what a write off is <laugh> and isn’t. So every time I talk about business write offs, that scene just rolls in my head and I crack up at it.
So here is what a write off is. Um, I had the exact wording. The IRS defines a business expense or a write-off as one that is both ordinary and necessary. That’s what a business expense is. That’s a very general and loose terminology, but if you ever question whether something is able to be a write off or not, just ask yourself that question. Is this ordinary and necessary for me to run my business? Now I want to give a little tip in here, question before <laugh>. Siri thinks I’m talking to her. That’s funny. Um, I wanna give you a tip here before I go through a list of possible write-offs. My biggest tip is as soon as you start a side hustle, open a separate checking account just for that business and be very disciplined and diligent in keeping that account completely separate from your family account.
Okay, now let’s go through a list of possible business expenses. Now remember, this list is not exclusive and it, this isn’t everything, but anything that is business related, I’m going to talk specifically about my s Scentsy business, but if you have another side hustle it, it could look the same just with small differences. The first thing is your startup kit. If you have paid out of pocket money for your startup kit, that is a write off. Now with s Scentsy, the largest amount that you’ll spend on a startup kit is $99 plus tax and shipping. You could get that kit with $0 out of pocket, but if you have paid money for a startup kit, that is a write-off any business supplies. Now, this is a huge, huge, huge category. Any supplies that you buy to run your business are write-offs, anything to make samples, anything like baggies felt, anything like that.
Labels to put on your catalogs in your products. If you need a new computer, if you need a new printer, all of that stuff. Gift bags, if you have to buy sacks to, to put customer orders in. All of that is considered business supplies, display products. Now this could be a product that you want to shoot a video of to put on social media. It could be products that you have set up in a storefront to display products. This, again, all of these are very broad and general categories advertising. Now this one is really interesting. The different things that fall under an advertising expense, of course, apparel, any apparel that you have that has your business logo on it, that is a write off. If you do fundraisers, any amount of money that you donate to an organization, it’s a gray line. Talk to your tax professional if, if it should be under charitable donations or advertising because it can be done different ways.
Any giveaways or donations that is advertising. If you set up at a local, um, craft fair and you have a drawing for a certain product, whatever the cost of that product was, that is a write-off as a giveaway or a donation. Any gifts that you give within your business are write-offs. I I mentioned samples under supplies. So the supplies that, again, that’s another one. It’s very loose talks to talk to your person whether they wanna under advertising or business supplies because you have the cost of the actual product and then the cost of the baggies or labels or whatever of that stuff. Um, you can even write off part of your mortgage if you have a dedicated office space within your home, a dedicated space for your business. You can write off part of your mortgage, any subscriptions that you have. Maybe it’s a, um, any type of business subscription.
So I have a subscription for the warmer and the scent of the month. That is a write off. I have my website subscription that is a write off. I have subscriptions to other services that help me in my business. I use project broadcast for texting. I use Zoom for meetings with my downline. All of those expenses are write offs. Any tools and equipment that you need. I mentioned computers earlier, think of cell phone and then all the things that tie, tie into that, excuse me, things like internet service or cell phone service. That is all write offs. If you go to training events, the cost of the event itself is going to be a write-off and then all the costs that go along with it. If you had to get a plane ticket, if you had to get a hotel or an Airbnb, all of those travel expenses, if it is a business related conference or event, all write-offs.
Then a really big one is mileage. Anytime that you are driving your personal vehicle for your business, you can write off the mileage. There’s a, a big debate, which is better to write off your car payment and repairs or to write off your mileage, talk to your tax person. They’re gonna give you the best advice for your business. ’cause every single business is different. Now it’s very important that you are doing good record keeping for this. I am a terrible person to give advice. I am awful about record keeping. So this section is going to be very brief and short. I highly recommend that you get a mileage tracking app. There are several out there. I use one called Mile IQ and I love it, but I know that there are lots of others out there that other people love. Now you need to be tracking your expenses.
You can do this using an app or you can do it the old way, the shoebox method way. That’s kind of my way <laugh>, I’ve tried the apps, I just don’t stay on top of them. So personally, I have an Excel spreadsheet that I keep everything in and then all my receipts go in a actual literal shoebox or I have a folder on my email that I save all of my receipts that have been emailed to me. So you just need to be tracking them one way or another. Let’s round this all out. And I want to go back to what I said at the very first of this video. Your side hustle can be so beneficial to your personal taxes. Many of the things that I mentioned to you as write-offs are things that you would have anyway, but they are necessary for your business.
Things like cell phone, things like internet. If you’re able to write off part of your mortgage, these are expenses that you would have anyway. If you are selling a product like Scentsy and you are loving it and you are purchasing lots of it anyway, many, many, many of those purchases can be used as write-offs if you’re sharing it on social media, if you’re sharing it with your friends, that is advertising. So that is why having a side hustle is super, super beneficial for your personal taxes. And again, I am not a tax professional at all. I am very, very lucky to have some, a great accountant and some great people that advise me in my business. So if you have any questions, normally I would say put ’em in this video or shoot me a text. But, but don’t <laugh>. If you have things that you’ve found that have worked for you, please share those in the comments below.
But if you are ready to jump on board with the side hustle, Scentsy is a great one, like I said, I’ve been working with him for 15 years and I would love to mentor you and help you. If Scentsy’s the one for you, just go to Jami Jo sells wax.com and up at the top corner you’re gonna see, um, a tab that says getting started. Click on that and um, I would be happy to jump in and help you get started. If you do have questions about starting a Scentsy business of your own, feel free to text me. 9 1 8 8 8 8 9 6 9 0. Guys, this was very loose information, but I hope that it was helpful to you in making a decision as to whether a side hustle is best for you. My name is Jami Jo, and I hope that you have a sensational day. Our government likes people to look for jobs and not opportunities. Therefore, I’m required to tell you that results are not typical. Now let’s take a second to look at what the word typical means. The definition of typical is usual, ordinary or average. No, these results are not average. But if you’re willing to put in some work and take a chance on your self, these results are possible. I’m here to prove it to you. It happened to me and it can happen to you. Check out this document for all the details.