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Publication 911 2003 Tax Year

Publication 911
Introductory Material

This is archived information that pertains only to the 2003 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Table of Contents

Important Changes
for 2003

Standard mileage rate. The standard mileage rate for the cost of operating your car in 2003 is 36 cents a mile for all business miles.

Increased section 179 deduction limit. .  The maximum section 179 deduction you can elect for property you placed in service in 2003 is $100,000. For more information, see Chapter 2 in Publication 946.

Addition of 50% special depreciation allowance. For qualified property you acquire after May 5, 2003, and place in service in 2003, you can take a special depreciation allowance that is equal to 50% of the property's depreciable basis. However, you can elect to claim an allowance at the 30% rate for property that qualifies for the 50% rate, or elect to claim no special allowance. For more information, see chapter 3 in Publication 946.

Depreciation limits on business cars. The total section 179 deduction and depreciation (including the 30% or 50% special depreciation allowance) you can take on a car you use in your business and first place in service in 2003 is generally limited. For those limits and additional information, including the maximum depreciation you can deduct in later years, see Passenger automobiles under Listed Property, later.

Important Reminders

Accounting methods. Certain small business taxpayers that are qualifying taxpayers or qualifying small business taxpayers may be eligible to adopt or change to the cash method of accounting and may not be required to account for inventories. For more information, including the definitions of a qualifying taxpayer and a qualifying small business taxpayer, see Publication 538, Accounting Periods and Methods.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1–800–THE–LOST (1–800–843– 5678) if you recognize a child.

Introduction

This publication explains general tax information of interest to direct sellers. It covers how to treat income, expenses, and other items related to having a direct-sales business. It also illustrates two filled-in tax forms that most direct sellers must file along with Form 1040. They are Schedule C (Form 1040), Profit or Loss From Business, and Schedule SE (Form 1040), Self-Employment Tax.

Who is a direct seller?

Some of the characteristics that identify direct sellers are listed below. A more complete discussion is contained under the heading Who Is a Direct Seller, later.

  • How you sell. You sell consumer products to others on a person-to-person basis, usually working out of your home. Or, you deliver or distribute newspapers or shopping news.
  • Where you sell. You may sell door-to-door, through the sales party plan, or by appointment in someone else's home.
  • When you sell. You may sell on a regular basis or only occasionally. You may sell full-time or part-time, such as a sideline to a regular job.

Who is not a direct seller?

You are not a direct seller if you are employed in a store, sell through a retail sales outlet, or sell your employer's product away from the employer's place of business.

Comments and suggestions.

We welcome your comments about this publication and your suggestions for future editions.

You can email us at *[email protected]. Please put “Publications Comment” on the subject line.

You can write to us at the following address:


Internal Revenue Service
Business Forms and Publications
SE:W:CAR:MP:T:B
1111 Constitution Ave. NW
Washington, DC 20224

We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

Useful Items - You may want to see:

Publication

  • 1 Your Rights as a Taxpayer
  • 15 Circular E, Employer's Tax Guide
  • 15–A Employer's Supplemental Tax Guide
  • 15–B Employer's Tax Guide to Fringe Benefits
  • 334 Tax Guide for Small Business
  • 463 Travel, Entertainment, Gift, and Car Expenses
  • 505 Tax Withholding and Estimated Tax
  • 525 Taxable and Nontaxable Income
  • 533 Self-Employment Tax
  • 535 Business Expenses
  • 538 Accounting Periods and Methods
  • 583 Starting a Business and Keeping Records
  • 587 Business Use of Your Home
  • 946 How To Depreciate Property

Form (and Instructions)

  • SS–4 Application for Employer Identification Number
  • Sch A (Form 1040) Itemized Deductions
  • Sch C (Form 1040) Profit or Loss From Business
  • Sch C–EZ (Form 1040) Net Profit From Business
  • Sch SE (Form 1040) Self-Employment Tax
  • 1040 U.S. Individual Income Tax Return
  • 1040–ES Estimated Tax for Individuals
  • 1099–MISC Miscellaneous Income
  • 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts
  • 4562 Depreciation and Amortization
  • 8829 Expenses for Business Use of Your Home

See How To Get Tax Help near the end of this publication for information about getting publications and forms.

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