Mlm Tax Deductions
Network marketers are often concerned about MLM tax deductions, because they are not really sure of what items or expenses can legally be deducted and what constitutes a real business. The IRS expectations are that anyone claiming expenses from a business is truly operating, on a profit level, a business. There are certain standards that the IRS uses to determine what is a legitimate business or not, and any self employed person intending on taking itemized deductions will want to be within those standards. Once legitimacy is determined, then entrepreneurs who work in network marketing will be pleased to know that most work from home individuals never take the full reductions possible. Adequate record keeping and good professional help should aid in working with MLM taxes.
Network marketing businesses, for some, are more of a hobby or past-time. The IRS is very aware of this possibility and may choose to audit any marketer that is not proving to be true money making venture. Expenses cannot be deducted unless the operations in the business are conducted for profit purposes. Simply buying into a multi-level marketing venture to have a business card and deduct an office in the home will not meet standards set forth by the IRS. MLM taxes and reductions are only available to those who run full or part time businesses, meaning a minimum of fifteen hours weekly. The IRS will actively investigate to see if a business has a history of profit. They will also ask business owners to demonstrate proof of operations. This means that the Federal Government wants to know that this venture is actually operating like any other company in an office location. Considerations may include proof or documentation of time, level of expertise, history in the field, and the levels of profit.
However, those that work hard with their organizations and turn a profit, or at least come close to a profit, will be able to take numerous MLM tax deductions from their returns. Marketers will be pleased with the amount of expenses that they can claim from a legitimate work from home business. The thinking should be in proportion. If an office in the home is used exclusively for the business then the percentage of space that the office takes up, can be deducted from a mortgage. In other words, if the office space takes up about 2% of the square footage of a home, then 2% of all expenses pertaining to the space can be deducted. Mortgages, insurance, utilities, and home repairs are all taken into consideration as MLM tax deductions. Cleaning services, office supplies, a percentage of the telephone bill, and answer machines are legitimate expenses. And, the standard office supplies and equipment will, of course, meet deduction standards. These expenses can only be claimed if the office in the home is the sole geographical location where administrative work is conducted. There cannot be another office space in another location to a receive home expense tax deduction.
Business travel is another wonderful MLM taxes advantage. Those who love to travel can deduct some of their adventures when they conduct business during the trip. Records will need to clearly document when business was conducted and the company purpose in the trip. But, even taking a small percentage of a vacation and applying it to an expense account can offer great benefits. Network marketers are called to conduct themselves in integrity and to use honesty when filing a return and making MLM tax deductions. This is especially true for Christian marketers who are representing Christ in all situations. The Bible explains that everything that is done is to be done in the light of who Christ is, including paying the IRS what is due. "I exhort therefore, that, first of all, supplications, prayers, intercessions, and giving of thanks be made for all men; for kings, and of all that are in authority; that we may lead a quiet and peaceable life in all godliness and honesty. For this is good and acceptable in the sight of God our Saviour: who will have all men to be saved and to come unto the knowledge of the truth." (1 Timothy 2:2-4)
Those who run a business from home may want to employ professional help in getting MLM taxes documents completed. A professional accountant or tax return specialist can help find any deduction that might have been overlooked, and know when excessive liberties have been taken. If not already working with a professional, there are local agencies and agencies online that can be considered. The most important point to remember, whether taking a return to a professional or completing returns individually, is that records are the most important document to have. Careful and complete record keeping will be the best way to utilize MLM tax deductions and may save you a lot of trouble in the long run.