If you've been hesitating on whether or not to start a home business, taking a look at the tax benefits could quickly change your mind. And if you've ever been worried that network marketing -- which usually costs you something each month -- was too expensive, probably you don't know how much it can help you save.
I am NOT a tax expert, so you want to make sure your tax adviser (even your tax software) correctly files your taxes and determines your savings. But let me show you the general idea here so you can make sure you're tracking your business expenses, keeping receipts, and providing this info to your adviser or software each year.
Let's say that you pay $1000/month for your home, but you're using one room strictly for running your business, and it's 10% of your home. You're also using it on a regular basis for business. This immediately gives you a $100 deduction each month from your taxes. If you're in a 20% tax bracket, this would be $20/month in your pocket.
Let's say you also spend $100/month on your cell phone, $50/month on your internet connection, and $20/month to pay for your computer. You figure that about 50% of their usage goes toward business. So you take 50% of $170 and you have another $85 deduction each month. In the 20% tax bracket, this is another $17/month you're saving.
Using your car for business? Keep track of the miles. Printing business cards? Keep the receipt. Advertising? Keep the receipt. Utilities for the house? You may be able to use a percentage of those as well.
So it costs you $50/month to purchase product each month for your network marketing business ... but you're possibly saving more than that on your taxes. All your ad costs, printing, etc.? Reduced costs because of tax savings. See how this works?
THE IMPORTANT THING IN ALL THIS is that you make legitimate claims. Stick with the spirit of deductions, keep your receipts, and write down what things are for. This doesn't have to be hard -- just keep a separate file for your business receipts and jot a note on each one -- and you can find that this goes a long way toward covering the cost of your business.
WHAT ABOUT DEDUCTING YOUR AUTOSHIP?
Some people will tell you that you can deduct the entire cost of your autoship if it's the ordinary amount that people in the business spend and that it's necessary to getting paid. In this case, 20% (tax bracket sample) of a $50 autoship would give you another $10 in monthly savings.
Personally, I am very careful about this. If I'm consuming the product for my own, PERSONAL good, I wouldn't deduct it. If I'm using it as samples to grow the business, then I would deduct it. If I'm using it as samples but SELLING those samples, then I would deduct the cost, but would have to REPORT the income.
If I were involved with an opportunity where the product was a business tool, and I used that tool for business purposes, then I would include it in deduction as with any other business expense.
In all cases, go with an EXPERT opinion and remember what deductions are for: to help businesses succeed in the midst of legitimate costs.