Tax Advantages of a Network Marketing Business

By Richard J. Norris

One of the things that many people tend to overlook when deciding to start a home business, through network marketing, are the tax advantages associated. Like even the largest corporations, you can take advantage of the tax codes attached to businesses to save on the amount you are currently sending to the government.

Incorporating Your Business

While it may not be a necessity immediately upon starting your business, incorporating and running your business through that corporation may provide hundreds in tax savings each year, due to the tax breaks that can be claimed by corporations that are not available to individuals. It's best to get advice from a tax accountant who can help you determine when incorporating makes the most sense, but don't ignore this tool for tax savings too long.

Common Expenses that Become Tax Deductions

There are common expenses that suddenly become tax deductions when you become the owner of a network marketing business. Since most of these businesses now require a cell phone and internet access, these bills can now be deducted at tax time. Likewise, the cost of a new computer, printer or fax machine all become legitimate business expenses. If you have the ability to dedicate a portion of your house or apartment to an office (it can't be a multi-purpose room, e.g. bedroom/office), that percentage of your rent/mortgage and utilities can also be claimed as deductions.

Products Given as Samples

While you can't deduct from taxes items from your monthly autoship expense that you consume yourself, you can deduct the cost of any that you give out as samples to prospective customers. Let's say you're in a health and wellness company and you give a sample of vitamins to a prospective customer valued at $20, you are allowed to claim that amount on your taxes, so be sure to keep a journal of what product, the date you gave it away and the name of the prospect. This information is extremely important in the event of an audit. Also, during your first year in business, the cost of the start-up package you selected to get your network marketing venture off the ground is 100% tax deductable, given it's mandatory for getting started.

Other Deductions

Most network marketing companies hold yearly conferences. Your expenses to attend these events, and others that may be held regionally, are fully deductable as a business expense. Travel, hotel and food are all items that you can track and claim.

Summary

Anytime you have questions pertaining to what is and is not acceptable as a deduction against your tax bill, consult a professional. But please keep in mind that owning a home business is one of the best ways available to the everyday person to lower the amount of money that they will owe to the federal and state governments at the end of the year. Many items that you are currently paying for out of pocket but can't deduct, immediately become deductions once you've started your network marketing career.

Note from Richard and Glenna:  If you would like to learn more about network marketing and the power it can provide you financially, please view the videos on the right, Brilliant Compensation and What the Wealthy Buy on Payday, and feel free to include your contact information when prompted to do so afterwards and we will be happy to contact you personally regarding the opportunity to get started with ARIIX. If you were sent here by one of our team members, please get back in touch with them and they will make sure you have all your questions regarding getting started with ARIIX answered.