Taxes and Network Marketers

Written by Eric Williams on Mar 16, 2010 10:58 am

NOTE: I live in the United States and this entry is based on U.S. tax laws. With that being said, I hope you're able to pull some value from this.

The network marketing tax incentives are just one of the many benefits to operating a network marketing business. Despite the fact there are numerous tax deductions that can be made, very few network marketers fully appreciate or take advantage of this opportunity. Did you know that most full-time employees work 3-4 months a year just to pay the tax man?!

The good news is that the network marketing tax advantages allow you to recover a lot of that tax back, adding significantly to your yearly income and ultimately improving your quality of life. After all, why pay more tax than you have to?

In particular, because network marketing is a home based business you can potentially claim the following network marketing tax deductions:

* The initial investment you paid to start your business
* Operating and depreciation costs of your business equipment (eg office equipment such as computers, faxes, furniture etc.)
* Phone and communications, including internet expenses
* Car expenses-including depreciation, mileage, fuel, repairs and maintenance
* Business operating software and management tools, which also includes webpages etc.
* Marketing material (this is a really good one in network marketing if you know how to use it)
* Prospecting expenses such as buying leads or lead generation costs
* A percentage of rent or mortgage costs (for the space you use to operate your business)
* A percentage of utility bills such as gas, electricity, water
* Household maintenance or improvement costs such as repairs or structural changes (eg air conditioning)
* Travel and accommodation - Did you do any work on that holiday?!
* Property taxes and insurance
* Restaurant meals, entertainment and dinner parties (make sure you know the guidelines for this one)
* Education and training also includes books, software, annual conferences or weekly meetings
* Security systems
* Moving expenses
* Tax preparation, accounting and record keeping fees
* Health insurance (mainly in the US)

As you can see there are a number of significant tax advantages to operating a network marketing business. Please bare in mind that every state and country has different tax laws. Don't assume all of the above are applicable to your business. I strongly recommend that you discuss these with a local tax representative or accountant. You should ask them to explain the guidelines and what is required on your behalf when making these network marketing tax claims.

There are many benefits to operating a home based business. Enjoying the tax advantages is just one. If you can learn to take advantage of these tax breaks, you’d be surprised how much it can add to your income.

Eric Williams

www.onlinerushhour.com