Tax Benefits Advantages of Network Marketing and Home Based Business

Starting your own network marketing home based business brings you a million-and-one benefits but the one specific benefit I want to talk about on this blog post are tax benefits since it is tax season.Most all network marketing companies have a monthly auto-delivery program a member has to be on to qualify for all commission bonuses. For example, it is typical that a brand partner of a network marketing company needs to be on a $120 monthly auto-delivery to qualify for all commissions. Guess what? Your monthly auto-delivery of $120 is 100 PERCENT TAX DEDUCTIBLE!We called the IRS to ask them if our monthly auto-delivery is 100% deductible. We spoke with IRS representative Colleen ID #0348881 and below is what the IRS representative said. First she asked several questions about how our business worked:Is purchasing the $120 monthly auto-delivery was a common practice amount for all members? which is “yes”
If it was expected for business builders but not consumers? which is “yes”
If it was helpful to drink the product? which is “yes”
Necessary to get paid? which is “yes”
Appropriate for network marketing industry? which is “yes”Based on the answer and Publication 535 Business expense page 2, the expenses would be ordinary (common and expected) and necessary (helpful and appropriate) in regards to our MLM business model. Which means the $120 purchase qualifies as a business expense.Also if a doctor recommends and supplies you MLM product out of their office, it is a medical expense for a patient. This is in the instruction for Schedule A.Other tax advantages to your home based network marketing business are the obvious expenses you can deduct, such as:A portion of your rent or mortgage – your business has to pay rent and that includes home-based businesses. Some of the amount that you pay each month in rent or mortgage payments can be counted as a business expense.
The cost of your computer
Office equipment and furniture – office desk, office chair, computer, software, telephone, printer, lighting, etc.
Internet connection
Phone bills
Your vacations and company events – This benefit can be huge! You’ll be able to deduct the cost of the plane ticket, hotel expenses, food, entertainment.
Conferences – There is no faster way to super-charge your business than to attend a conference. You’ll get a fantastic business education, get a chance to network and best of all get to write off the expense.
Restaurant meals – Take out members in your down-upline, up-line, or anyone you talk to about your home based business and the meal is on the IRS.
Groceries – Your home office needs some food for visitors. It is unlikely you will get away with your entire grocery bill but food you consume for home events and visitors is a legitimate deduction.
Some car expensesIn conclusion, it is hard to put a positive spin on paying taxes. It always hurts but we all have to do it. The good news is that by joining any network marketing company there are tax deductions that you would not have been able to deduct if you did not have a home based business.Always consult with a tax professional. We cannot provide any warranty about the information above.

Hiring An Auction Company

Estimating your assets value:

Typically, one of the first questions a business owner will ask me is, “how much will the assets bring at an auction”. After taking the time to review the assets, the auctioneer should give the client a conservative estimate of the sale based upon his experience and the current market trends. It is important that the company give realistic expectations so the seller can make informed decisions based on their best interest.

Compensation and Expenses:

Is the company you are considering working for you or against you? The agreement you decide may determine this.

A business owner should carefully consider how the auction company is compensated. The most common commission structures include: straight commission, outright purchase of assets, guaranteed base with a split above to both auctioneer and seller, guaranteed base with anything above going to auctioneer or a flat fee structure.

In a straight commission structure, the company is paid an agreed upon percentage of the total sale.

In an outright purchase agreement, the auctioneer simply becomes your end buyer. The company purchases your assets and relocates them. While this can be an option in some unique situations, keep in mind that they will want to purchase your assets at a very reduced price to make a profit at a later date.

In a minimum base guarantee, the auction company guarantees the seller that the auction will generate a minimum amount of sales. Anything above that amount either goes to the auction company or split with the seller. While a seller might feel more comfortable doing an auction knowing that he is guaranteed a minimum amount for his sale, keep in mind that it is the best interest of the auction company to secure a minimum base price as low as possible in order reduce their financial liability to the seller and secure higher compensation for the sale.

In a flat fee structure, the auctioneer agrees to show up for the sale and call the auction. There is no incentive for the auctioneer to get the best prices for your assets. The auction company is compensated regardless of the outcome of your sale.

What is the best option for business owners? In my experience, an agreed upon straight commission structure. This puts the responsibility on the auction company to offer the best outcome for everyone involved. There is an incentive for the auction company to work hard for both parties, set up and run a professional sale, get the highest bid and sell every item on the inventory. Successful auctions translate to a higher bottom line for both the seller and the auction company.

Auction Expenses:

In most auction agreements the expenses to conduct an auction are passed to the seller. If the auction company pays for the expenses, it is simply absorbed in higher commission rates.

All expenses should be agreed upon in advance in a written contract. Typical expenses will include the costs of advertising, labor, legal fees, travel, equipment rentals, security, postage and printing. A reputable auction company will be able to estimate all expenses based upon their experience in previous auctions. An agreement should be actual costs charged as expenses, not an estimated amount.

Advertising is typically the highest cost in conducting an auction. The auction company needs to set up an advertising campaign that will promote the sale to its best advantage and not overspend to simply advertise the auction company.

Once the auction is complete, the auction company should provide a complete breakdown of all expenses to the seller, including copies of receipts within the auction summary report.

Buyer’s Premium:

What is a buyer’s premium? If you attend auctions regularly, you are very familiar with this term. The auction company charges a fee to the buyer when they buy an item at auction.

The buyer’s premium has been around since the 1980′s and is standard auction practice. It was first used by auction houses to help offset costs of running brick and mortar permanent auction facilities. Since then, it has spread to all aspects of the auction industry. It is prominent in online auctions and allows auction companies to cover added expenses incurred from online sales.

It is the responsibility of the auction company to provide clear disclosure of the buyer’s premium to both the buyers and the sellers. Those not familiar with auctions are often taken back by the buyer’s premium. They looked upon it as an under handed way for the auction company to make more money. Reputable auction companies will provide full disclosure within the auction contract, advertisement and bidder registration.

Typically, an auction company will charge online buyers a higher buyer’s premium percentage than those attending an auction in person. Extra fees are incurred with online bidding and are charged accordingly to online buyers. This provides the seller a level playing field for both online buyers and those attending the auction in person. Without the buyer’s premium, there is no way to do this.

Pre-Sales:

We’ve all been there. We’re looking forward to attending an auction only to find that some items were sold prior to the auction date.

As an auctioneer with over thirty-six years of experience, I can honestly state that pre-sales will hurt an auction. When a company decides to liquidate their assets, it is easy to sell off high-end pieces of equipment through online sources, equipment vendors or to other businesses. The seller receives instant cash and avoids paying a commission to an auction company.

Auctioneer’s find themselves appearing to acting in a self-serving capacity when potential clients say they are planning to sell off parts of their inventory prior to an auction. It’s hard not to consider the auctioneer’s commission when they warn you not to pre-sell anything. Yes, the auctioneer wants to earn a commission on those sales but it is more important that the auctioneer protect the sale from potential negative backlash that comes from pre-selling. The buying public knows when an auction has been “cherry picked” prior to the sale and it reflects in their bidding. It becomes a sale of “leftovers” and that impacts prices.

A buyer who purchases prior to the auction usually does not attend the sale. They already bought equipment at a good price with no competition. If they do attend the auction, they tend to let others know of their great pre-sale purchases which again, impacts prices and the overall excitement of the sale.

It is important to understand that auctions work best with a complete inventory. You want competition on your higher end equipment. The easy to sell items make it possible to gain respectable prices for hard to sell items.

When a business owner decides to liquidate their equipment assets, there is only one opportunity to do it right. Hiring a reputable auction company will assist you with a professional, orderly and timely liquidation.

Why Is Home Based Business Popular?

With very challenging financial situations at present, many are into starting their own home based businesses. With lesser financial and document requirements, this start up business is very appealing to many. Some of the most popular home based businesses are laundry service, wedding planner or coordinator services, consultancy, retail or online selling, among others.Whether a first timer or somebody who has decided to quit white collared jobs, you will soon realize that setting up a home based business is far simpler than putting up a general business. Of course, when you start a home based business, you are still free of the many document requirements which are usually demanded of businessmen. This allows you to spend less time in all these and instead focus on other important things such preparing for the launch of your actual business.Having a home based business can also help you determine the feasibility of a particular product you are selling, should you want to eventually expand or grow the business. It helps you determine the kind of market that is responsive to you and at the same time know the different changes or modification you need to apply to the business. A home based business becomes a practice for you.You get to do your business right out of your living room or your bedroom. Whether you are maintaining a permanent job while having a home based business or juggling part-time jobs, this kind of business is deemed convenient for anybody. Since you are doing a job at your own home, you get to call the shots in decision making.Maintaining a home based business is appealing to many because it also allows you to have a minimal overhead expense. Unlike setting up a general store or shop, you are to maintain rent or lease and operational expenses such as basic utilities. In this way, a starter businessman or entrepreneur may start with just using his personal savings to start up the business. This will also permit him or her to generate profit easily. Most of starter businessmen nowadays, are hesitant in having their investment sitting for a long time in any particular venture.An Online business has become more popular over the years due to the limited investment needed along with the number of options available to make a decision. An online business either reduces or eliminates the need for personnel plus there is no longer the commitment of a break and mortar facility.Do your research in choosing an online business. Access the information below for full detail on successful business model.


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