You became a coach, rep, consultant, because you loved the product. But, in doing that, you also became a business owner.
Wait, don’t freak out. I know you’re thinking, “what?? I didn’t mean to do that!”
It’s a good thing! It opens you up to a bunch of write-offs come tax season. Write offs mean less taxes that need to be paid in at the end of the year…. if you do it right. AWESOME!
There are some technicalities in whether you are a hobby or a small business. If you consider this a hobby – you can’t take the deductions. If you consider it a business – well, hello write offs. Hobby vs. Business is normally in the income produced. You’re allowed to have 3 years at a loss, then they consider it a hobby. But, 3 years is a long time AND if you’re increasing your income year over year – you’re pretty set.
Now that we got that out of the way. Let’s get to the good stuff. What is considered an expense in my home based business that can be deducted?
I’m so happy you asked. Did you spend money on something for your business??? Yes? Keep the receipt! It could be a write off.
Coffee with a prospect? Travel to your company’s yearly convention? Purchase of business cards? Vendor event fees? Gifts for your team? Your monthly business or website fee? YES! It’s for your business.
Here’s the deal. There are a lot of possibilities when it comes to deductions. I have put together a general list of possibilities that you can get below. You will have to talk with your CPA about certain categories and whether they will work for your home based business. But, this is a starting point for you to be able to gather all the information you need.
I’m providing the meat and potatoes, but if you want the full recipe, I highly recommend reading Sandy Botkin’s book, “Lower Your Taxes Big Time.” She talks a lot about what you can deduct in your business and how to do it confidently!
Leave a comment if you have any questions and share it with your team!
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