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Tupperware Sales Represent Taxable Income

Taxes
feldman_amy Amy Feldman
Amy E. Feldman is a business commentator and legal business...
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By Amy E. Feldman

PHILADELPHIA (CBS) – Did you get a free set of Tupperware for hosting a party? Yeah, Uncle Sam wants a piece (of your profits, not your plastic ware).

Those Tupperware parties of yore have turned into the big businesses of today. It is estimated that 91 million people worldwide are now involved in what’s known as the ‘direct sales’ business, with international sales topping $153 billion.

If you host Tupperware parties, sell Mary Kay cosmetics. Silpada jewelry or the like, in which you either sell the products to a group of friends or neighbors or recruit others to sell the products, here’s what you need to know: All income that is received as a result of a direct sale is taxable.

But that doesn’t mean just the income from the sales you make. You are also taxed on commissions, bonuses, or percentage of income you make off the sales of those who work down the line from you. And you are also taxed on any prizes you get for meeting sales quotas, including the credit you get toward the company’s products you buy.

And if you get a gift from the company, it’s also taxable based on its fair market value.

With all of the tax implications, it takes more than a pretty face to sell Mary Kay – it takes a real head for business.

Check with your tax preparer before filing your taxes.

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