There are two separate tax codes in America, one for businesses and one for employees. The basic difference is that businesses pay expenses first then pay income tax on what’s left while employees pay income tax on their entire income and have to make do with what’s left to pay expenses.
Can you see what that might look like for a network marketer? Say you sold nutritional supplements and one of the requirements of your MLM company was a $100 monthly autoship. Your supplements are now a business expense. You have a home office, so a percentage of your home is tax deductible. You also have to have a car to meet with local prospects, a computer, cellphone, internet service, etc. Once they all become a part of doing business they all become tax deductible business expenses.
The thing with being self-employed is that you have to remember to pay quarterly estimated taxes. Employees don’t usually deal with this because their employer takes the taxes out of their paychecks for them before they even see the money. As entrepreneurs, we get to guess how much money we are going to make each year and pay quarterly.
With all of the tax benefits, I’ll definitely take the quarterly tax payments.
