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Mastering the 60/40 Split


1/5/2021 Tax TimeHosted by NSD Kristin Sharpe and Leigh Ann David

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Playback No.:Playback Number: (712) 775-7029 Access Code: 499-966-920# Reference No: 366

New for 2020, the Internal Revenue Service (IRS) requires Mary Kay Inc. to issue a new form called 1099-NEC (Non-Employee Compensations) if you:

  • Earn commissions, prizes, gifts or awards totaling more than $600; or
  • Had income tax (backup withholding) withheld during the year.
  • The IRS also requires a Form 1099-MISC to be issued if you:
  • Purchased $5,000 or more of wholesale product during the year.

You will receive both the 1099-NEC and 1099-MISC if you meet both criteria listed above. The forms will be postmarked and mailed to you on or before Feb. 1, 2021, to the address on file as of Dec. 31, 2020. If you do not receive a Form 1099-NEC or 1099-MISC, you are still required to report your Mary Kay business activities to the IRS. Learn more here.

You should keep detailed records to support your income and expense information. These records may include, but are not limited to, sales tickets, packing slip/invoice included with each wholesale order, monthly commission and bonus statements and business expense receipts. In addition, you need to perform a physical count of the inventory that you had in stock as of Dec. 31, 2020.

To find helpful tools to:

  • Locate your order history, go to Mary Kay InTouch® > Business Tools > myBusiness > My Order History.
  • Locate your customers' orders, go to Mary Kay InTouch® > Business Tools > myCustomers > Manage Your Orders.

The Company suggests using an accountant or personal tax adviser who is familiar with federal, state and local laws to advise and assist you in filing your federal and state income tax returns as well as, but not limited to, any gross receipts, excise, business and occupation, sales, use, property or other taxes you may owe.

For additional information, Tax Essentials for 2020 will be available on Feb. 1, 2021, on Mary Kay InTouch® under Resources > Tax as a guide to assist you in the preparation of your federal income tax return as it relates to your Mary Kay business.

By Feb. 1, 2021, Income Advisory Statements will be available on Mary Kay InTouch® under Business Tools > myBusiness > Reports > Monthly & Historical > Income Advisory Statement. The Income Advisory Statement lists total commissions earned, total prizes and awards, and Mary Kay Career Car information (gross lease amount and amount paid by Mary Kay Inc.). It also lists purchases including Section 1 wholesale, Section 2 purchases, sales aids, Starter Kit, Mary Kay eStart, New Beauty Consultant Sample Pack, Sales Director supply orders, Sales Director Buzz Kits, Mary Kay® Personal Web Site fees, any The Mary Kay FoundationSM donations made with wholesale orders, Preferred Customer ProgramSM, Seminar souvenirs, career apparel, shipping and handling related to Customer Delivery Service and shipping and handling related to Section 1 and Section 2 less Customer Delivery Service.

If an Independent Beauty Consultant does not have a Mary Kay InTouch® account and she meets one of two qualifications, the Income Advisory Statement will be mailed:

  • Earn at least $200 in Company commissions, prizes or awards.
  • Meet the qualification to receive any 1099 for 2020.
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