Network marketing tax deductions are a great way to save money on your taxable income.
Network marketing tax benefits are plentiful. There are many everyday expenses that you can legally claim as deductions if you own a network marketing business.
In order to qualify for these deductions, you have to treat your network marketing business as a business, and not like a hobby.
Don't think that you can start a network marketing business, not work on it, and still claim deductions for business expenses. You should treat your business as a business and take it seriously, for reasons that go beyond tax deductions.
This article will focus on tax deductions specifically related to a network marketing business. If you are looking for general home based business tax deductions,
click here.
Start-up Expenses/Recurring Dues Most network marketing companies have a small start-up cost for joining. Some even have a small monthly fee required for maintenance. These fees do qualify as tax deductions. As you can see, you will need to keep up with receipts from the very start of your business.
Education and Training You may have volunteer training and educational programs provided by your network marketing company. If you sign up for them and have to pay a fee, you are able to claim them on your taxes.
Besides company organized trainings, you may also decide to purchase eBooks, magazine subscriptions, or take a class. As long as these purchases are business related and increase your business knowledge, you can claim them on your taxes.
Postage and Office Supplies Save receipts for any stamps, postage, or packaging that you purchase for your business. You may have to send things from time to time to potential and existing customers. You can save money on your taxes by claiming those expenses.
Also, any kind of office supplies that you purchase are eligible for network marketing tax deductions. These items include (but are not limited to) pens, highlighters, sticky notes, printer paper, staplers, printer ink, notebooks, and staples.
Marketing Expenses You can market your business online and offline. So whether you are buying brochures or magazines to give potential customers, or running a Google Adwords campaign, you will qualify for network marketing tax deductions. Other types of advertising such as newspaper, magazine, radio, or television ads are eligible network marketing tax deductions as well.
Also included in this category are business card expenses and any copying, printing, or letterhead that you've paid for. For example, we have purchased business cards, magnets, and return address labels for our business. Those items are 100% deductible on our taxes.
Home Party Expenses If you've noticed, you won't find anything promoting the use of home parties on this site. Been there, done that with little success. But, maybe some of you have already splurged to host a home party this year.
If so, you can claim all or a percentage of your costs as tax deductions. Save your receipts for food, drinks, and decorations you purchased specifically for the party.
Also, any vouchers or giveaways you offer your guests are tax deductible.
Online Network Marketing Tax Deductions Any type of domain name, web-hosting, blogging, or web design expenses are tax deductible. You can also deduct for the cost of internet service, internet security, computer software, and tax software.
Home Office Deductions You can also use the standard home office deductions for your home based network marketing business. You can deduct for your mortgage, energy bills, and phone bills.
These deductions are not at 100%. To figure your network marketing tax benefit, calculate the percentage of your home that you use for business. If your home office occupies 15% of your home, then you can deduct 15% of the above items.
This deduction gets sticky because you have to use the area of your home specifically for business purposes. So to stay out of trouble, ensure that you have a specific space in your home set aside soley for your business.
Equipment Purchases These network marketing tax deductions include items such as a new computer, printer, fax machine, telephone equipment, camera, and camcorder if purchased specifically for the business. Some items you are even able to claim depreciation on for up to 3 years.
Eating and Entertainment Expenses
If you are taking a prospect to lunch or out for a round of golf and the topic is your network marketing opportunity, you may have the opportunity to claim 50% of that on your taxes. This is a gray area in network marketing tax deductions.
In case of an audit by the IRS, you want to make sure you have detailed records of these events. Keep a business planner or small notebook with you to record the date, time, and topic of conversation.
We are not tax professionals. You should only use this as a guide for your network marketing tax deductions. If you have further questions, please contact a CPA or tax advisor.
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