When you are approaching prospects with an attempt to recruit them into your company and on your team, one of the top benefits you should always make known to them are the many tax deductions that are available.
To help you know the deductions that can be claimed, I have decided to list them for you.
Tax Deductions #1: Your Monthly Autoship
Depending on the network marketing company you are attached with, you just may be able to deduct this expense. According to the IRS, these questions must be met:
- Is the monthly purchase a common practice for all members?
- Is it expected for all home based business owners but not customers?
- And is it needed to make money?
It would be considered a business expense if you answer yes to these questions.
Tax Deductions #2: Your Office
As long as you have an area within your home that is only used as your office space, you can claim a nice home office deduction. It is measured by the square footage used. But the IRS has made this deduction easier to take as more and more people have started home based businesses.
Tax Deductions #3: Promotional Items
Nearly anything you invest in to promote your business can be a deduction. This could be:
- Paid advertising
- Promotional clothing
- Business cards
- Brochures and fliers
Be sure and keep all receipts just in case there are any questions.
Tax Deductions #4: Vehicle Expenses
When you use your vehicle for business, there is a deduction you can take. There are 2 types of deductions, standard mileage and actual expense. You will have to choose.
It is a good idea to log all vehicle activity. This way you have records and it will make the tax process much easier.
The IRS explains those deductions on their website.
Tax Deductions #5: Utility Costs
Since you use part of the home as an office, you can also deduct a certain percentage of the utility costs. Keep in mind that if any repairs must be done, a percentage of those costs may also be deducted too.
Tax Deductions #6: Website
The costs involved with setting up and managing a website geared toward promotion of your products or services may also be deductible.
This means that if you contract a freelance agent to manage your website or even social media, you can use it as a tax deduction.
Tax Deductions #7: Personal Development
Anything you purchase that is meant to help you learn more about the business or the managing of it is considered an educational deduction. So if you
- Buy personal development books
- Take training courses
- Attend seminars
- Or even join Rocket Recruiting
So essentially, the IRS will pay you to learn. Isn’t that great!
Tax Deductions #8: Interest On Business Loans Or Business Credit Cards
If you took any type of loan to get your business “fired up,” or if you used a business credit card to purchase any supplies or inventory, you can take a deduction on the interest you have to pay.
This is an often overlooked deduction. Don’t let it slip by. It may not amount to a lot, but every bit helps reduce your tax liability.
Tax Deductions #9: Meals And Entertainment
If you take your downline, upline, prospects, etc… out to a lunch or dinner or some type of entertainment, you can deduct these costs. As long as it is business related, this is considered a business expense.
There are many tax deductions and this should be a focus when you are presenting the opportunity to prospects. Just pointing out how a home business can save money on taxes can usually entice prospects to listen carefully and join.
I want to add that I also developed a tool that makes the tax portion easier to manage. Go learn about The Expense Tracker here.
While taxes can cause frustration and stress, use what you learned today to alleviate that stress with prospects.
Just post them below.
Thanks and have a great day!
Could you please advise if your program works for Canadian residents?
Yes. We have many Canadian members and tax advisors within the system.
Have a great day!