How to Claim Scentsy Income

Claiming Scentsy Income
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Income you receive from Scentsy is reported in one of two ways depending on how the money you earn is characterized. People who sell and distribute Scentsy products are independent Scentsy consultants. If you earn Scentsy income in this capacity, you are self-employed and must report your income and expenses to the IRS as a self-employed individual. If you are employed by Scentsy at a corporate office location, you are a W-2 employee. W-2 employees do not report expenses for work and report income to the IRS in a different manner than self-employed consultants.

Independent Scentsy Consultant

Step 1

Receive Form 1099-MISC from Scentsy Inc. The 1099 shows the commission you receive during the year as an independent Scentsy consultant in box 7, "Non-employee compensation."

Step 2

Obtain IRS Schedule C and Form 1040 from IRS.gov. Report income you receive from Scentsy on lines 1,3 and 7. Include the amount shown in box 7 of the 1099-MISC. If you receive income from your Scentsy business that is not shown on the 1099, you must add the total additional income to the sum of your 1099 figure.

Step 3

Report expenses you incur for operating your Scentsy business on Schedule C, Part II. Examples of expenses you may deduct include the cost of your Scentsy brochures and marketing materials, the cost of your starter kit and demonstration supplies, shipping and handling costs for receiving product orders and vehicle expenses for training seminars. Report your total expenses on line 28. Subtract your total expenses from your total line 7 income and report the difference on line 31.

Step 4

Report the amount on Schedule C, line 31 on Form 1040, line 12. Attach Schedule C to your income tax return.

Scentsy Employee

Step 1

Receive your W-2 from Scentsy at the end of the year. Scentsy must send W-2 forms to employees by the last day of January.

Step 2

Obtain Form 1040 from IRS.gov.

Step 3

Find box 1 of your W-2 form, "Wages and tips and other compensation." Report the amount on Form 1040, line 7.

Tip

If your net profit from selling Scentsy as an independent consultant is more than $400, you also owe self-employment tax. Complete IRS Form SE to calculate the tax.

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