With all these great tax advantages, you could easily employ a small army of tax lawyers and accountants just to identify them, let alone interpret them.



You still need to have a general idea about the main advantages so you can make sure you are taking every tax advantage that is rightfully yours. No one is going to look out for your business any better than YOU!

Most people who have been in Network Marketing also known as Multi Level Marketing (MLM), are fully aware that this is a very social business. But for those of you just starting out, this is really important to know because taking advantage of these tax codes enables you have more write offs at the end of the fiscal year. And more write-offs equates to you keeping more of what you earn.

So with this industry being a social one, that means you have to talk and interact with people. And since you need to east every day, you might as well have some fun and do it while you are recruiting, selling or just sharing information about your company.

Unfortunately, this is one of those great expenses the IRS keeps carving away at. Every year they cut away just a bit more. Currently, your deductions are now limited to 50 percent. Most importantly, you must be able to document the substance of the business discussion, the business relationship and who was actually being professionally entertained by you.

Here is specific criteria to ensure you get the deduction:

1. The purpose of the entertainment event or the outing was to conduct business.

2. You engaged in business or discussed business during the entertainment function

3. You expected either income or a business benefit would come of the entertainment

The business discussion must be conducted either during the activity, immediately preceding or immediately following the activity and must be a substantial discussion. According to the IRS, it does not mean that you have to spend your entire meal discussing business. You will not have to spend the entire basketball game shouting over the fans regarding the opportunities of your latest and greatest network marketing company It does mean, however, that at some point before or after that basketball game you must have discussed the business purpose of the meeting.

So what constitutes a business activity? Here is the next sort of "test" you will want to ask yourself: The entertainment activity is

1. associated with conducting your business

2. completed directly before or after the substantial discussion of your business.

Some great examples of deductions in this category are

* Restaurants

* Sporting Events

* Trade Association Meetings

* Theater

* Concerts

I have found that the easiest way to keep track of these types of business deductions are two-fold. One, always, always use a designated credit or debit card for all such business expenses that you plan to deduct. And two, on the actual receipt, write the names of all persons present at the event, including yourself; write the name of the company for which you were conducting business and third, a brief summary of the nature of the business meeting content.

Keep a separate business envelope for each month of the year in your briefcase and put the receipt into the corresponding envelope immediately. Also keep a running tally of these types of expenses in something as simple as an excel spreadsheet or software created specifically for business expenses.