Business tax filing requirements

I became an Herbalife Independant Distributor in April, 2007. Had borrowed a $3,000.00 loan for the business (all paid to Herbalife to qualify as a supervisor) plus paying for other business expenses like adverstising, website services, mailing, online merchant services, etc. And had purchased more products from Herbalife for resale since then. But I had quit doing business since September, 2007. According to the Form 1099 from Herbalife, they "marked" (for Box 9) "Payer made direct sales of $5,000 or more of consumer products to a buyer (recipient) for resale. (Tax had been charged when I purchased products from Herbalife.) I have not resale at least half of those products that I have "purchased". I've only done approximately $1,000 worth in resale business. Do I have to file this "business"? Would I be in trouble if I don't file?

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Submitted 339 days ago...

Mtnrescue

Professor (1,529)

Well, first you carry unsold inventory as an asset, not a proceed from sales. Also, you should create a simple P&L (profit and loss) statement in excel, lisitng out all of your expenses - gas for driving around trying to sell the stuff, cost of product, sales, marketing, training (Herbalife Supervisor training), etc. My guess is that you would show a loss on the business which would also be deducted from income from another job otherwise I would guess that you would still be in business. So, you should file but you list out all of your expenses and deduct those costs from anything sold. Good luck.

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