Tax Season 2021 Details (for the 2020 Year)

  1. Home
  2. Knowledge Base
  3. Pay Portal & Getting Paid
  4. Taxes
  5. Tax Season 2021 Details (for the 2020 Year)

Tax Season Information

When will Ambassadors receive their 1099/T4A?
US: 1099’s will be available for download and/or printing in US Pay Portal accounts by January 31, 2021.

CA: T4A’s will be mailed to Canadian Ambassadors by February 28, 2021.

For US Ambassadors
For all of our US Ambassadors, in accordance with Internal Revenue Service requirements, you will receive a Form 1099 for cumulative payments of $600 or more made to you including: personal and team sales commissions, bonuses, and incentives trips you’ve earned during 2020.  The Form will be made available for download and/or printing in your Pay Portal accounts by January 31, 2021. If you do not see your 1099 in Pay Portal by February 9, please contact the Delight Center.

For CA Ambassadors
For all of our Canadian Ambassadors, in accordance with the Canada Revenue Agency requirements, you will receive a T4A Form for cumulative payments made to you of $500 or more made to you including: personal and team sales commissions, bonuses, and incentives trips you’ve earned during 2020. The Form will be mailed to your mailing address on record by February 28, 2021. If you do not receive your T4A by March 7, please contact your Delight Center.  Please make sure your mailing address is up to date in the Ambassador Lounge so you receive your T4A.

Potential W-9 Updates
Did you legally change your name?  Please update your information in your Pay Portal accounts. You may be subject to a $50 penalty by the IRS if you fail to furnish a valid name/Tax Identification Number (TIN) to a requestor.

What payments are included on my 1099/T4A?
Amounts (commission earnings, and incentive trips) you received January 1 – December 31, 2020 will be included on your 1099/T4A. If you sold with more than one Brand in 2020, you will get only one 1099 for all of your work and not separate 1099’s for each Brand. The account number associated with your 1099 will be the account number (Ambassador ID, Designer ID, or Specialist ID) that you earned the most money with.

How do I file taxes as an Ambassador?
As an Ambassador, you’re are an independent contractor and file your tax returns as self-employed. This simply means that along with your usual tax information you’ll also report your income and expenses as an Ambassador. You’ll still only file one return – your personal income tax return – but you’ll include some extra forms. The additional form in Canada is the T2125 Statement of Business Activities or in the US is the 1099 form – each form contains your self-employed information. You’ll record your income as well as related business expenses to determine your net income as a Stella & Dot Ambassador. It’s important to note that you are only taxed on your net self-employment income. This means that it’s especially important to record all of your business-related expenses. This will lower your net income, and subsequently lower your taxes.

Do Ambassadors need to make quarterly estimated tax payments? (US Only)
You will generally need to make estimated tax payments if you expect to owe the IRS $1,000 or more in taxes when you file your tax return. If you need more information, please contact your tax professional.

Who can help me if I need more information about how to use the 1099/T4A to prepare my tax return?
We are unable to provide further tax guidance, so we recommend you contact your personal tax professional.

What expenses are deductible?
Generally, all legitimate business expenses are deductible (there are some exceptions). Understanding which expenses are allowed will help you deduct with confidence and avoid overpaying on your quarterly and year-end taxes, no matter where you are in your career. Some common deductions include:

  • Home office (i.e. utilities, mortgage interest, repairs, insurance etc.)
  • Office supplies & postage
  • Meals & entertainment
  • Gifts to clients
  • Travel & hotel
  • Professional development
  • Advertising and marketing
  • Software
  • Mileage and gas
  • Taxes

General Taxes FAQs

What is a 1099? What is a T4A?
A 1099 is the US form that shows the amount of reportable earnings that you received from Stella & Dot (including earnings from any of our other Family of Brands) during a calendar year. A T4A is the 1099 equivalent in Canada. This is used for tax purposes.

The 1099 includes information about the payer, Stella & Dot (name, address, phone number, Federal ID number); the payee, you (name, address, SSN, Ambassador ID); the amount of non-employee compensation (reportable earnings during the calendar year) provided to you by Stella & Dot (Box 7); and, if applicable, Federal income tax withheld (Box 4).

The T4A includes information about the payer, Stella & Dot (name, address, phone number, Payers Account number); the payee, you (name, address, SIN, Ambassador ID); the amount of self employed commissions (reportable earnings during the calendar year for which taxes were not deducted by the payer) provided to you by Stella & Dot (Box 20).

Who receives an Earnings Statement (1099 or T4A)?
Stella & Dot Family of Brands is required by law to send a 1099/T4A to any Independent Contractor (Ambassador) to whom we make payments (in compensation for services rendered) of $600 or more during per calendar year for US Ambassadors and $500 or more per year for Canadian Ambassadors. Payment also includes (again, by law) the fair market value of incentive trips with associated costs (flight and hotel).

What are reportable earnings?
These include the value of any payments that Stella & Dot makes to you. This can be in the form of money (i.e. commission payments, coaching commissions, volume rebates, bonuses, reimbursements, basically any cash payment made to you through your Pay Portal, etc.), and trips (Glam Flights and Hotel charges S&D paid for on your behalf).

What is non-employee compensation?
Non-employee compensation is anything of value (i.e. money, merchandise or services) you received from Stella & Dot during the calendar year as compensation for services you performed (i.e. selling products, coaching your downline and earning coaching commissions). It’s money from which income taxes were not withheld. The term used by the CRA (Canadian Revenue Agency) is “self employed commissions.”

What is the difference between a 1099 and a W-2/T4?
A W-2/T4 is issued to employees by their employer and includes information about taxes deducted from the employees pay. Because you are an Independent Contractor and not an employee of Stella & Dot, no taxes are deducted, and you receive a Form 1099/T4A instead of a W-2/T4.

Other Helpful Resources:
For some basic information on home office tax deduction, check out the following website:
http://www.mydswa.org/organizing-your-office/quick-books

US Ambassadors:

10 Tax Deductions Every Freelancer Needs to Know

The Importance of Keeping Business and Personal Finances Separate

Complete Guide to Taxes for the Self-Employed

Get your first 30 days free and up to 50% off QuickBooks Self-Employed + TurboTax!

Canadian Ambassadors:

https://turbotax.intuit.ca/tips

Little Known Tax Breaks for Self-Employed People

Tax Tip: When Are Tax Returns Due for Individuals and the Self-Employed?

2016 Canada income tax calculator

Auto-fill My Return: The quick and easy way to get your taxes done right

Get 20% off TurboTax online products and 50% off QuickBooks Self-Employed!

Want more specifics?
US Ambassadors: Consult the Federal Tax Guidelines for home-based businesses.
·         Using a Schedule C for your small business:
http://www.irs.gov/pub/irs-pdf/p334.pdf
·         Guidelines if you want to use your home for your business office:
http://www.irs.gov/pub/irs-pdf/p587.pdf

Canadian Ambassadors: Check out the Canada Revenue Agency website:
·         http://www.cra-arc.gc.ca/menu-eng.html

Questions?
Keep in mind that our Delight Center reps will not be able to provide additional information regarding how to file your taxes. Should you have questions about how to file, we ask that you please consult a tax professional for additional guidance.

Please note this is not legal advice. Under your Stella & Dot Family Brands Independent Business Owner Agreement, you are solely responsible for complying with all applicable laws.  Please keep in mind that laws are subject to change.  The information presented is provided “as is” without representation or warranty of any kind.  We do not represent or warrant that such information is or will be always up-to-date, complete, or accurate.  Any representation or warranty that might be otherwise implied is expressly disclaimed.

Related Articles

Malcare WordPress Security