Freda's Foibles Work At Home Tax Deductions
by Freda Douglas
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This article, written by and used with permission of Jim Lynn, is longer than most, but since I think it is important information for the average person to know. I am assuming you will find it as informative as I do, and you’ll not find it boring, and I ask you to share it.
The words, "I quit" have never been more costly.
Network marketers hear "I quit" all too often from distributors they have sponsored. Part of the problem is lack of mlm training. However, if those home-based network marketing distributors only knew of the thousands of dollars they were throwing away, they would never quit. Here's why:
The moment your prospect enrolls in your program, they may be eligible for an instant $300 or more pay increase from their place of employment.
And the best part is—This money can be in their hands starting with their next paycheck! Think what that could mean as an incentive to boost your network marketing program.
How is this possible?
Did you know the U.S.government has TWO income tax systems and that most people are in the wrong one?
Consider this information as MLM Training Basics Course 101. There is one tax system for employees that includes most working Americans, and a very different, much better tax system for business owners. Most company sponsored MLM training programs ignore this fact completely as deductions available to wage earners, and hence, they pay a large percentage of their income as a tax to the government. Conversely, business owners get to deduct (write-off) just about everything from apples to zippers, and pets to donuts.
When payday comes, employees immediately lose a large chunk of their wages to income tax withholding. Business owners, on the other hand, get to keep what they earn, spending it on whatever they want or need to, and then pay taxes only on whatever is left over. Said another way, business owners buy things with BEFORE-tax dollars. Employees buy things with AFTER-tax dollars.
Arthur Godfrey once said, "I'm proud to pay my taxes. I'd be just as proud to pay half as much."
By signing a Distributor Agreement form in your program (or enrolling to be eligible for commissions) with the intent to make a profit, your prospect becomes a business owner. As a business owner, they are authorized by the U.S. Congress to immediately receive tax benefits not available to them previously.
But a big chunk of this employment income is missing from each paycheck. It goes to the government in the form of a tax withholding payment. Most network marketing starts out part-time. That is to say, marketers are employed with outside income.
If you are employed, pull out one of your recent pay stubs and compare your gross pay to your net pay. Up to 1/3 of what you earned is missing. It went to pay your tax bill. The reason? Employees have few deductions available to them to offset tax withholding.
However, there are enough deductions involved in a home-based business to cut the average American's taxes by $5,000 to $10,000 or more per year.
Here are just a few tax deduction you may claim as a NWM home-based business owner.As a home-based business owner, you may be eligible to deduct 100% of all medical, dental, optical bills, health insurance premiums and deductibles your family pays on your annual IRS 1040 tax form. You can deduct up to $4,250 for every child in your family and spouse as employees of your business. Why? If they carry out the trash, if they wash the car, if they dust your home business work place, the IRS considers them
a part of your business expenses. Equipment, employee costs, utilities, loan interest, insurance, security system and medical cost. But it also includes vehicles, travel expenses, entertainment, magazine subscriptions, and even the coffee in the kitchen...And these are only a few of the legitimate deductions the business owner can take.
The average taxpayer does not have these benefits.
In fact, the greatest tax reduction strategy in America is to start a home-based business. By quitting their network marketing business, NWM distributors lose thousands—even if they never make a profit from your business offer.
Give Yourself An Immediate Pay Increase
By becoming a home-based business owner, you are instantly eligible to free up dollars in your paycheck, and increase your take home pay now rather than waiting for next year's tax refund. You and/or your spouse may adjust your W-4 exemptions at your place of employment, and immediately take home up to $500 or more per month that is now being withheld. That translates into one BIG pay increase with money you can spend or invest now!
If you had triplets, you would go to your employer and change your W-4, tapping into hundreds of dollars. The same goes for your home business. The day you opened your home business you tapped into potentially thousands of dollars in deductions, enabling you to raise the number of exemptions on your W-4. Your take home pay goes up by hundreds of dollars (even if you didn't have triplets).
W-4 forms exist for one purpose—to claim withholding exemptions. This form may be amended at any time, any number of times, without penalty. The more exemptions you claim, the greater your take-home pay will be. For accuracy, use a W-4 Exemption Increase Calculator form to figure your pay increase (This form is one of several included in the People Who Network ebook).
Remember, this is your money, not “the IRS's.” Why wait until April 15th to claim your money when the government allows you to take it now? You do NOT need to show a profit in your business to claim more exemptions, only the intent to make a profit. Deductions claimed on your IRS 1040 tax form justifies claiming your income. Network marketers can easily claim $20,000 or more in deductions.
What could you do with an extra $300 per month?
If you had an $80,000 thirty-year mortgage on your home, owed $10,000 on your family car and had $3,800 of credit card debt, you could be debt free in 8.5 years—And you could create 1.2 million dollars in investments that generates $10,000 per month in interest income. WOW! All from giving yourself a $300 pay raise.
You could also use that extra $300 to buy products needed to qualify for commissions in your NWM venture. You could afford to advertise your business, set up an online marketing system and much more.
You also now have a way to help your prospects fund their NWM business, thereby removing the "I can't afford it" objection right off the table.
Take action. You could be bringing home hundreds of dollars more per month in your paycheck. Pass this report on to your downline and be sure to share this good news with all your prospects.
It's Not How Much You Make, But How Much You Keep That Counts!
The BEST KEPT SECRET about Network Marketing is not about earnings, but rather about keeping what you have already earned. A home-based business can mean thousands of extra dollars in your pocket. Do not cheat yourself of this most valuable income producing strategy—keeping what’s yours!
We are talking about putting thousands of dollars into our pocket that are now going to Uncle Sam by overpaying our taxes. Many taxpayers have taken on part-time jobs to make up that loss. How much more productive could we be to ourselves if we learned how to keep what we earn? Surely it is worth a few minutes a day to document business expenses to keep our money. This is critical.
The difference between documenting and laying claim to legitimate home business tax deductions, and not doing so, is many times the difference between having to take another job and staying at home. You decide which is more taxing.
Buy Winds of Change by Freda Douglas by visiting www.booklocker.com/books/3303.html
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