Direct Selling Tax Deductions – Home Office Saves MoneyPosted by Deb Bixler
Direct Selling Creates Income With Tax Deductions
Direct selling and network marketing is one of the best income tax reduction strategies there is in the 21st century.
Operating a direct selling business from home opens the door for many income tax deductions.
Did you ever notice that all rich people have a business?
- Did the business make them rich?
- Or did they get a business because they were rich?
Chances are they developed a business so that they could take advantage of certain tax benefits and that in turn assisted them in gaining more wealth.
The home business is a legitimate income tax reduction program that the IRS/CRA/ATO (or whatever the tax agency is called where you live) has put into place.
Anyone who owns a business has a legal income tax reduction package to utilize to their advantage.
The direct selling tax deductions are an AWESOME recruiting incentive!!
If you are an individual or family struggling financially, the quickest way to increase your cash flow without too much time commitment is to start a direct sales or network marketing business.
The income generated from your new business will, of course, be helpful and the immediate income tax reduction will increase your cash flow substantially!*
Save With Direct Selling Tax Deductions*
For example in a direct selling business many of the things you are now spending money on will become an income tax deduction.
- Cell phones: even shared family plans
- Magazines subscriptions or cable TV, depending on your company, can be considered as market research
- Mileage to and from general errands that you are doing for your family can be deductions provided you intersperse business errands and lead-collecting in with the daily activities. Imagine deducting 60-80% of all your miles traveled, at 39 cents a mile…. That will really add up quickly!
- Meals and entertainment out can also be deducted provided you talk business and ask for referrals from your friends.
- Are you taking vitamins? When you are in a vitamin network marketing company, the vitamins may be deductible.
- Do you buy groceries? In a food-related company, a good part of your grocery bill may be deductible for market research, even if your family is eating the food.
- Are you giving the kids an allowance? Are your kids ages 7-17? How would you like to pay them for errands around the house, or helpful things they do, then take those payments as an income tax reduction?
(I am not an accountant nor am I giving you tax advice)
Are you starting to see why all people with money have a business?
These are things you will always spend money on. When you have a direct selling business they become income tax deductions. That alone will increase your cash flow, even if your business does not make money immediately.
Income Tax Deduction – Home Office
Another income tax reduction strategy available to direct sales consultants is the home office deduction. It never ceases to amaze me how many people do not take advantage of this strategy. Even relatively large successful individuals say, “I do not want to send up a red flag.” Or “My accountant won’t let me because it is a red flag.”
The government does not create laws just to “catch” people and get them in trouble when someone uses the law as it is written.
There are no flagpoles down at the tax office!
|Think about this. When you open a store at the mall or in a shopping center, you will buy toilet paper, floor cleaners, light bulbs, maybe put up a sign, and even wash the windows, take out the trash, pay rent or cut the grass.|
As a business owner you can deduct all of those from your taxes. This will not put up a red flag because these are business expenses.
Everyone can understand that. In your home business, you still have all those expenses affiliated with your business. Only now they are a percentage of your home expenses. The home office deduction recognizes that as a home business owner, you can deduct a percentage of your electric, your gas, your garbage, your telephone, toilet paper, cleaning supplies, etc. This is the home office deduction.
Take The Business Tax Deductions And Be Compliant*
There are steps you must take to be compliant with the tax bureau. Most people think that they are required to show a profit periodically when in fact that is not so.
In order to be compliant with the tax regulations you must:
- Show an intent to profit: This can be done with a business plan
- Generate activity: Activity is what makes a business profit!
- Have documentation of that activity: It is easy to document your business activity with a calendar, checkbook, mileage log, etc.
The interesting part of those requirements is that they create a circle of success. When you have a plan, you generate activity and, when documented, the process creates income and deductions, which in turn gives you motivation to continue and creates cash flow.
The business plan is updated yearly based on your successes and the cycle or circle of success continues.
Share this article could make an awesome opportunity tool. A little education goes a long way when you are focusing on growing a team.
Finding Business For Direct Selling
- The Power-UP For Professional Results is a program for direct selling consultants that teaches professionalism and how to fill your calendar.
- The Direct Sales Recruiting University is a team training concept that leverages a leader’s time as you create a caring and sharing team.
All successful businesses have a business plan.
It provides you with the system of activity, documentation and planning that protects you in the event of an audit.*
*I am not a lawyer or accountant. Always use a tax accountant who is familiar with the direct selling industry. I am not giving you tax advice.