"Tax Breaks For MLM Businesses"
By Peg Bastin
Everyone knows there are lots of tax advantages when you
have a home business. Even MLM, right? Are you sure?
Yes there are, as long as you meet certain requirements to
qualify for these tax breaks. The requirements are not
difficult to meet, but don't take these deductions without
knowing the rules to qualify.
IRS auditors are given a set of 8 Secret Factors to use in
determining if your activity qualifies as a legitimate
home-based business. They're called 'secret' because they
are not disclosed openly to the taxpayer.
You can qualify for thousands of dollars in legitimate tax
deductions if you meet the most important of the 8 factors.
These factors are not classified, so here are the four most
important criteria:
#1: Expertise of the taxpayer or his/her advisors. MLMers
qualify cause we all have upline who have expertise, even
if we do not.
#2: Time and Effort the Taxpayer puts into running the
business. How much time and effort is enough? The rule says
45 minutes a day, 4 to 5 days a week qualifies.
#3: The Manner in Which the Taxpayer Carries On the
Business Activity. Conducting your business mostly on the
telephone, on the Internet, and in-home presentations are
the best ways to qualify. You can still claim deductions
for business done on the golf course, at lunch, or the pub,
but keep the necessary records and be sure to conduct your
business like a business, not a hobby.
#4: Is the Primary Purpose of your activity to Produce a
Profit, or to Produce Tax Write-offs? Have a Business Plan
that includes a table of Income and Expense projections,
clearly showing profitability in the future. You are not
required to show a profit, but you must show that you
intend to produce a profit.
Congress has told the IRS to give huge refunds and
deductions to taxpayers who have a home-based business, OR
anyone who operated one at any time in the past 3 years.
Why? It's good for the economy. If you get downsized in
your job, you'll have another source of income you can work
on full time. This will also help keep unemployment rates
down. They're hoping maybe some of us will strike it rich,
and then pay a LOT in taxes!
You may even qualify for these deductions retroactively! If
you had a home-business in any of the past three years, you
could be eligible to file an Amended Tax Return, and
possibly get a refund plus interest!
Just as a traditional business can write-off utility, rent
or mortgage bills as "costs of doing business," you too,
can write-off a portion of your utility bills also.
You can claim huge tax deductions for your vehicle if you
use the "IRS Two Business Location Rule" to convert
non-deductible "commuting" miles into fully deductible
business miles. Learn this rule and follow some simple
procedures and vehicle mileage deductions can be worth up
to $3,000 to $5,000 in new tax deductions.
Do you give your kids an allowance? If you "employ" your
kids to do part-time work in your home business their
"Allowance" would become "Payroll" and therefore be tax
deductible to you, and tax-free to them.
Do you talk business while on vacation? You could deduct up
to 100% of your expenses, including play time, if you plan
your trip properly in advance.
A brand new tax law allows you to immediately write off up
to $100,000 on the purchase of business equipment,
including certain new vehicles. Be sure your accountant is
aware of this new law.
These deductions are 100% legal! There are many others
also. If a traditional business can deduct it, your home
business probably can too. So follow the rules, keep proper
records, have fun, and make money!
I'll be back again soon with some more tips and resources.
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Written by Peg Bastin, who is an avid internet marketer,
glad to help others get started in their own online biz,
with Ron Mueller, author of "It's How Much You KEEP, That
Counts! Not how much you Make" © 02/15/2004
Tired of overpaying Uncle Sam?
http://www.bastinmarket.com/taxpreparation.html
Free ebook:
http://www.bastinmarket.com/taxesdl.html
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