DOES THE IRS PAY YOU TO BE IN NETWORK MARKETING
Today we see gas prices escalating at alarming rates to the extent that many people cannot get to work; In 2008 we saw food prices escalating at 40% in one year. Corn increased 60%, rice 80%, wheat 120% and soy at 80%. The American dollar is collapsing all over the world. We now have expensive food and shortages will become more prevalent all over the world, especially here in America.
We are going to see beef and chicken prices go right through the roof. Business like dance studios, karate studies and gymnastic studios are going under every day as people conserve just to put gas in their cars. Incomes are not keeping up with the prices of goods and services. Americans are now classifying health insurance as a luxury and are canceling policies to once again put gas in their cars. Health spas and gyms are going under every day to save money. What are you supposed to do? What you are about to read will give you hope for the future.
Most people today spend the majority of their time scared to death about the security of their jobs. And if they have a job they are working hard and harder developing strategies to generate more income through their 8-5 job or a second or a third job. In other words, they think that the secret to taking care of themselves and their families or becoming wealthy is to work more and work harder. While making more money to make ends meet is important, their reasoning is fatally flawed. That’s because they are working hard and not smart. They are unknowingly throwing money away every single year in the form of taxes and are completely unaware of this amazing fact.
The more unstable our economy, the more people are pursuing Network Marketing as a spare time, part time or even a full time business. Why? Because Network Marketing can potentially provide that extra $300 – $500 a month to put that gas in the car and pay the utility bills. It is a fact; historically Network Marketing businesses grow rapidly as the economy deteriorates. What you can potentially earn is indeed exciting but what you can potentially save on taxes is even more inviting.
One of the biggest areas where employees throw money away is overpaying your taxes and becoming a victim and a hostage of the W2 work force. Remember most of us were educated to get a job and get a W2.
Our educational system is designed and manipulated to generate W2 income for the Government. Students are constantly being programmed to work for a company in an 8-5 job generating W2 income and that’s a fact! Unfortunately, this is the costliest form of income taxes there is. In fact, the average American who has a job, gives up between 35% and 55% of his/her income in the form of taxes.
Currently we have a Federal tax rate that can be as high as 39%. States can charge as much as 9.6% and some of us even have to pay a City income tax rate as high as 3%. Then, there is the invisible tax known as FICA or Social Security.Besides having a JOB (Just Over Broke), when people retire the average American has practically no cash saved plus their social security, which is very little to brag about!
The fact is for most people taxes are their largest expense. They can eat up to 50% of every dollar you earn. Accepting W2 income as the only way could be the one misstep that could be costing you thousands and thousands of dollars every year.
Did you know that having and developing your own Network Marketing business can be a viable and legal way to save you potentially thousands of dollars in taxes every year even if you have a regular day job?
This is money you can use to put back into your business, buy gasoline, put your child in dance or gymnastics, buy a new car, pay for a child’s education, give to charity, take a great vacation with your family or buy your spouse a great gift. It’s yours to spend or invest as you see fit and the deductions can be plenty and are completely legal in every state or province. In fact the IRS wants your small business to succeed. On their website there are many tools to help you and guide you.
THE ULTIMATE TAX SAVING STRATEGY TODAY IS FOR YOU TO START YOUR OWN NETWORK MARKETING BUSINESS TODAY!
Decades ago, the Supreme Court issued a judgment that WILL have a profound impact on your financial future and the future of your loved ones. The Supreme Court of the United States of America said that “… there are two tax systems in this country, one for the “EDUCATED” and one for the “UNEDUCATED.”
The “UNEDUCATED” tax system is what we call the W-2 system, where you have a job, get a check, get a W2 and pay the taxes. Its goes kinda like this. You make the money. The IRS takes the taxes (up to 50%) and you live on the rest. Here’s how it goes to better illustrate:Earn $ (paycheck)-Taxes (State, Federal, FICA) Spend what’s left
There are only a handful of deductions available to you in this “UNEDUCATED” or the W2 system. Even if your tax preparer does a great job, in this system, they can have very little impact on what you take home or get as a refund.
The “EDUCATED” system goes kinda like this: You earn money, you expense it off with legal deductions, and you pay taxes on the remaining balance. It looks like this:Earn (revenue from sales, commissions, royalties, bonuses)-Expenses (as described below) Pay Taxes on what’s left
Knowing this one fact and that is to start your own Network Marketing business (“EDUCATED” tax system or 1099 income) can have a huge impact on your tax bill and what you keep and therefore on your financial wellbeing as well as your future retirement.SO, IF YOU DON’T HAVE YOUR OWN NETWORK MARKETING BUSINESS TODAY; START ONE RIGHT NOW!
You will dramatically increase your spendable income by putting yourself into the lucrative “EDUCATED” 1099 tax system. The potential benefits of doing this are absolutely incredible. This very simple strategy alone could save you thousands of dollars or more each and every year, especially if you are presently working in job generating W2 income.
The incredible tax laws allow Network Marketing distributors to harvest, substantial tax benefits, these are the same laws that XEROX, BOEING, FORD, MICROSOFT, KENNECOTT, EXXON, and SEARS benefit from year after year. The only difference between most Network Marketing distributor businesses and these major companies in the eyes of the IRS is, believe it or not, their size.
WHAT IS DEDUCTIBLE BY A NETWORK MARKETING DISTRIBUTOR?
When you discuss business at lunch or dinner with potential customers, customers, potential distributors and/or distributors even friends your meal could be 50% tax deductible. For that matter, so are theater and sports event tickets, and other expenses relating to entertainment focused on building relationships with these people. (Remember, by definition, everyone is a prospective customers or distributor of your Network Marketing Business!)
Automobile mileage is deductible between your home-based business office and any meeting where business is being discussed, such as the meals in a restaurant as mentioned above, or an opportunity presentation or even playing golf with friends who could be prospective customers or distributors!
You can also deduct the percentage of expenses associated with your car or cars that is used in business such as car insurance, car property taxes, car payments and interest, mileage or gas and oil expenses, repairs, tires, car washes. If you work n 8-5 job you can’t deduct any of these things.
Travel and parking is deductible, be it to an industrial center, a home, a meeting place or an island resort, especially if the purpose is to discuss business or attend trainings with other travelers, or prospective customers or distributors.
If you take your spouse his/her travel expenses can also be deductible if their presence is helpful in assisting or closing sales.
You can also deduct wages paid to your children for help in the business – and if those children are under 14 and have no other sources of income, all wages under $4,000 per year maybe tax free. It’s a great way to help save for college with help from the Government.
You can also pay with pre-tax dollars for expenses like braces, eyeglasses and visits to the doctor or dentist, if properly structured through a qualified medical expense reimbursement plan; this is easy to do with standard IRS forms.
Home computers, laptop computers, printers, I-pods, internet services, business cards, materials for your business, flyers, newspapers, magazines, fax machines, telephones, certain membership dues, office supplies, and office furniture used in business are also potentially fully tax deductible and there is much more. You can even deduct some of the products if you use them as samples or use the empty bottles as displays in your presentations.
The IRS’s only requirement for you to have these deductions is that you legitimately treat your Network Marketing business as a business and not a hobby. That means regularly working your business with the intent to make a profit even though you may not have made a profit.
WHAT COUNTS AS “REGULARLY WORKING” YOUR BUSINESS?
Attending your meetings and trainings; calling on people, using the products, telling people about the products, e-mailing or mailing information and teaching others to do the same.If the distributors you sponsor actively follow your company’s training and advice, they should make money if they work their businesses; but even if they don’t, the IRS will recognize their right to their home-based business tax deductions in the form of business losses, if they keep good records and document their activities and expenses!
DOCUMENTATION IS EVERYTHING!
Documentation is really a simple process. It means taking just 10 minutes a day writing in your day planner all business-related appointments, which you do anyway, business activities, business- related expenses such as lunches, dinners golf tee times and business appointments. Consistent record keeping will prove to the IRS (in the rare case that they ever would need to see the planner) that you are working your business and not engaged in a hobby. It doesn’t matter if it makes money or not, you just have to try to make money. Just writing down who you spoke with about the business, where you went and at what time you were there. Write down everything you purchased right down to the pen, pad and paper you purchased at Wal-Mart. These are all legal, deductible business expenses!
For an investment of just 10 minutes a day and working your business spare time, part time or full time, the time spent documenting is worth thousands of dollars in potential tax savings, money you either get back or don’t have to pay. That’s could be lot of money each month in extra income to you, money for gas in your car. For the miniscule enrolment fee it costs to join a Network Marketing company, don’t you see the savings potential here?
HERE’S A SAMPLE DAY FROM A DAY PLANNER
8:30 AM:Breakfast meeting with Mike Wang and Keith Burger (Good friends). Talked about company and products. Left brochure and flyer. Will get back to them in a week. Breakfast cost $24.50. Mileage from home office to breakfast and back: 15 miles, cost of materials 50 cents. Ate at IHOP, kept receipt!
11:45 AM: Lunch with wife and Jenny Cutler (a co-worker). Talked about how great I felt using the products. Lunch Cost: $15.75. Ate at Chiles, kept receipt! Jenny purchased $150 worth of products.
5:30 PM:Had a cocktail with Lynn Agosh (a friend). Discussed my business. Drinks cost $16.00, kept receipt. Lynn purchased $200 worth of products.
7:00 PM:Attended Opportunity Meeting. Mileage to and from event: 10 miles. Watched and gave support. Meeting cost $5.00. Kept receipt!
OTHER DEDUCTIONS COULD BEAttend basketball games all year and invited friends, talked about my business. Cost for tickets = $600.
Lunch/dinners with co-workers and prospective customers or distributor where you discuss business! Deductible business expenses, $3,000 x 50 percent deductible = $1,500.
Travel expenses for you and spouse to go on vacation, if you hold opportunity meetings or give presentations or had out flyers (could be to the friends you are visiting) and your spouse participates = $3,000 x 50 percent deductible = $1,500.
Home office deduction for use of room in your house; where you operate your business. Payment is $1,400 per month x potentially 20 percent deductible = $280 per month x 12 months = $3,360 (plus you may be able to deduct 20% of utilities, insurance, improvements, repairs, garbage removal, water, sewer, property taxes and much more)
Automobile mileage from home office to your day job or other places where you actively encounter prospective customers or distributors and then actively discuss the product or the business with them! (20 miles round trip to work x 250 days x 35 cents/mile) Anywhere you travel and you discuss business and document it … enables you to potentially deduct the expenses involved, including mileage = $2,700.
Tax-free wages for two of your children without other jobs who assist you in your Home-Based Business (2 children x $4,000 per year paid to savings accounts for college, service missions, weddings, etc.) = $8,000
Health insurance expenses for your family (Spouse is an employee of your home-based business, who chooses to include you and the children in the plan — $350/month time 12 months) = $4,200.
That’s potentially $21,860 total tax-deductible expenses x 35% combined Federal and State tax rate = $7,651.00 cash refund from IRS after April 15th!
You can even deduct the tax preparation fees charged by your accountant or CPA.THE “EDUCATED” OR THE “UNEDUCATED” SYSTEM … IT’S YOUR CHOICE!
Let’s say you are working a job, the line under your income on your pay stub is where these two systems differ. With the “UNEDUCATED” system, you deduct the three lines under your income and the remainder is what you are entitled to.
With the “EDUCATED” system, where you are in business for yourself as a Network Marketing distributor, the first line is your reported income as with the “UNEDUCATED” system.
However, the second line is the money you spent in your business, and you pay taxes on what is left.
This is because when a business spends money it is called a business expense, which represents a tax deduction. Therefore, having your own business and being in the “EDUCATED” tax system, you can potentially reduce your taxes by 40-70%. To break this down even further: If you are making $45,000 a year in a job, having a Network
Marketing business could potentially save you up to $7,000 in taxes you don’t have to pay or you get refunded.
It does not matter if you are making millions of dollars or just a few thousand dollars a year; the “EDUCATED” tax system applies to you! (Read Judge Learned Hands statement below)
Most small-business owners, including Network Marketers have an ongoing relationship with their tax preparers to simplify their tax filing process each year. Even so, some deductions can easily be overlooked, deductions such as the deductions for children working in your family business.
The following is a synopsis of a list of business expenses that are often passed over during tax preparation season, and can serve to reduce your tax bill substantially. Be sure to review these with your accountant or tax preparer, you may find some potential tax deductions you may have missed.
Consult with your tax adviser when considering deducting any of the following items because some limitations and special requirements may apply.• Advertising and printing of business materials (Letterhead, envelopes, business cards, CD’s, DVD’s, etc., as well as advertising in mailers and media) • Automobile expenses for business use, using either actual costs of repairs and gas or the standard mileage deduction. You may also be able to deduct a percentage of the insurance premiums, tires, property taxes, registration fees, etc.• Business food and entertainment, golf (Up to 50% of the bill)• Business equipment and furnishings (Includes computers, printers, projectors, screens)• Business safe deposit box fees • Depreciation on business equipment • Office supplies • Software costs• Consultant fees• Computer repairs • Telephone (cell phones), Internet, television and other communication used for business purposes • Business gifts, provided they meet IRS criteria • Business insurance premiums • Costs of subscriptions for business books, periodicals or newspapers • Donations your business gives to charities. • Dues or membership costs to professional organizations • Education costs for self, when business related • Expenses when moving offices or other business facilities • Fees and penalties • Relating to CDs, business checking, savings or money-market accounts • Associated with retirement accounts • Credit bureaus, Better Business Bureaus, local associations reports, etc. • CPA, tax attorney and financial planner fees• Interest payments on business loans • Janitorial, home maintenance, landscaping and other maintenance costs • Losses due to fire, windstorm, hail, flood or other natural disasters may. • Losses due to theft may be deductible. • Mortgage or lease payments as well as home property taxes and expenses to run the home • Self-employed tax deductions • Individuals can deduct a percentage of their health insurance premiums paid during the year, both for themselves and for their dependents • May deduct one-half of their self-employment tax • Shipping, packaging and postage costs• Tax preparation fees, accounting fees, attorney fees, insurance consultation fees, etc. • Travel expenses • Hotels, airfare, meals and business entertainment while on the road • Costs of passports for self and employees when traveling for business purposes • Laundry costs when traveling for business • Unpaid invoices or debts (i.e., uncollected debts). • Utilities for business facilities
THIS IS REMARKABLE INFORMATION
Billings Learned Hand was a very famous judge. Judge Hand served for many years as Chief Judge of the United States Court of Appeals for the Second Circuit Court, headquartered in Manhattan, after prior service on the United States District Court for the Southern District of New York. He is remembered in connection with early cases construing the free speech clause of the First Amendment and as a pioneer in applying economic reasoning to American tort law. Hand is considered by many judges and attorneys to be the most influential American judge never to have served on the Supreme Court of the United States.
This is Judge Hand’s famous quote that has been expressed in many tax court cases
“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”
MORE INFORMATION ON JUDGE HANDhttp://en.wikipedia.org/wiki/Learned_Hand
The book entitled “Learned Hand the Man and the Judge” is available at Amazon.com.
This information contained herein is for educational purposes only. You must be actively working your business and pursuing a profit to file for business deductions (lunches, trips, house, visits, etc.) mentioned above, and you must be documenting your activities. Please contact your tax advisor to discover what tax advantages you qualify for.–