All the Self Employed Moms, Mlms, Freelancing Etc

I agree with a couple of the others posts about checking with the pros and cons with a CPA first especially about the tax questions.

I have been an independent legal nurse analyst and now am a wellness educator. I'm also involved in a couple of MLM's. The one thing that has always stuck in my mind is be very careful about the home office deduction. Many years ago, when I was doing my legal nurse stuff, our tax person said that there are so many "ifs" with that rule that it makes it very difficult to defend if you are ever audited. Then just recently, within the last 2-3 months, I was talking to a CPA who relayed a horror story of a work at home guy who was being audited. Apparently the guy was very careful and only used his "home office" for work related activities. When meeting with the auditor, shortly after the holiday's, the auditor seemed to be making small talk with the guy and they discussed having family in for the holidays. The work at home guy made an off handed comment about putting a blow up mattress in the "home office" to accomodate out of town guests and boom he was nailed for trying to claim something that was not always used for work related activities.

I know when I travel and/or go to work related meetings I don't save meal receipts since I feel I would have to eat anyway. But I have colleagues who save every single receipt.

Good Luck

1 mom found this helpful

HI N..
Buy the book "lower your taxes big time" It's by a former IRS attorney. Chapter one is open a home based business. He gives you all the dos and don'ts of tax write offs. It's a great book.
Many folks in my business have their accounts read it.
Good luck
N.

1 mom found this helpful

The one thing you need to do is check with your CPA as to whether you want to take certain deductions for the home office because once you do that then you turn your house from personal property to business property and there are tax consequences to that decision. I am self employed as a CPA and I take normal office deductions such as internet access lines, computer equipment (sec 179), telephone, etc... but I do not take part of my house and write off depreciation because I do not want to turn my house into business property. It would not be financially smart for me to do that since I am in a better position when I sell it for it to be personal property.

1 mom found this helpful

Yes, Yes, Yes and Yes. My husband and I joined an MLM last year, it paid off. Let me know if you are interested, maybe you can join ours.

Hi N., I own an insurance agency and get a 1099 and I own an MLM and get a 1099. Check out this website: http://www.YummyLiquidVitamins.com It helps your health AND your wealth. Let me know if you have questions!!!!!!!

Hi N.!

It's been great to read all the moms answers to you. I definitely agree with Jennifer S. But one other thing to know about joining a MLM is that you need to file with the city of Los Angeles. It's free if you do it prior to starting your home based business. (They get ya because you don't even know something like this exists... it's like you're supposed to read minds. uh, government)
It's the Business Tax Form and you can go to www.lacity.org/finance to learn more. Anything that is 10-99 goes through this. (we learned this the hard way : / )
If you make under $100,000 your exempt from paying any extra taxes.
We've been in Network Marketing now for almost 3 years. Some good years, so not so good. This year has been a good one, and yes the tax benefits are wonderful. But just like everyone else said make sure you have a CPA that is familiar with home based businesses.
Good luck!!
B. : )
www.amaxyng.com

There are several choices you can make here. My husband and I own several businesses (a couple of which are MLMs). You might want to consider creating a separate business entity. There are 2 major advantages for doing that. The first one is for the tax advantages. By incorporating your business (or creating an LLC, LLP, or other entity), you are able to take advantage of more of the legal tax code as a 'business' or 'corporation' than you do as an 'individual' or 'sole proprietor'. I recommend reading 'Lower your taxes' by Sandy Botkin. Some of the other posters mentioned some tax strategies, but just remember there are 16000+ pages of the legal tax code! There are SO many more things that you are allowed to do as a non-sole-proprietor entity that you can't do as a sole proprietor.
The second advantage is protection from liability. If an individual were to sue your business, they would sue your entity and wouldn't be able to sue you personally. In other words, if you personally own a home or other asset they wouldn't be able to go after it because of the way your entity is structured. If you haven't done so already, consider opening a trust as well, for further asset protection.

But before you make any decisions, you need to consult with a CPA and an estate planner so that you can make the best decision based on your family needs and your business direction. Ideally, your CPA and estate planner/attorney will be in communication with each other so that they are able to best serve you from both angles.

Hope this helps! If you'd like more information or detail, just message me!

Good luck with your new venture!

Hi N.,
I have been in an MLM for 15 years and the tax benefits are great. I am considered a small, sole owner business. I can deduct a portion of my home expenses like electricity and phone since I have a home office. Other expenses I can deduct include mileage, advertising, website, office supplies, etc.
I have an accountant that is familiar with the tax laws for a home business.
I don't know which MLMs you have considered but you may want to check mine out. Here are a couple of 3 minute messages you can listen to: Roger Barnett, Chairman & CEO - ###-###-#### & Project MAHMA™ - ###-###-####.
Good luck. I hope you find the right answer for you.
V.

Hi there. I may be wrong, so I would check into this. But, we were once told that if you deduct your home office for tax purposes and then go to sell your home down the road that you have to take of a $ amount of the asking price b/c of claiming it on taxes. My husband worked out of our house for a couple of years and when we went to HR Block this is what we were told. But, like I said I would double check with a tax specialist first.

Good Luck with your extra work!

The great thing about working from home is the flexibility it brings. When I was investigating having my own business vs. becoming a Heritage Makers consultant I had many of the same questions/concerns you have. The reasons I chose Heritage Makers are many - 1) you don't have the overhead of having to establish a business license, new brand etc. 2) you are an independent contractor and decide when you want to work and how much you want to make 3) you have the benefits of training and support from an upline team of directors that want to help you succeed 4) you can write off all of your expenses associated with the type of business you choose. With Digital Publishing that meant cameras, printer, scanner, home office, travel, shipping, etc. I found it to be an easier transition than navigating a new business on my own. I was able to get started for a relatively small investment and earn back my investment quickly. I have also expanded on my business by offering book-designing services and scanning. If you are interested in checking it out, please see my website www.storybookfamily.com. I am always looking for talented-Mommies to join my team!

Independent Contractor You would be responsible for all your own withholdings etc... Of course check out which title benefits you best with Uncle Sam. At my age, I would love to work at home and add some income. Tell me more about MLMs Freelancing.

Best Wishes to you with your home business.

N.,

If you desire to get your writing published, let me know. I am in the book publishing business and would love to help you get started!

K.

I am a freelance writer and I'm considered a self-employed business owner. When you're self-employed, you have to pay taxes quarterly based on estimated earnings. I would highly recommend meeting with a CPA before going this route to make sure you do everything correctly. You can take a lot of things as business expenses and a CPA can help you make sure you catch them all. The biggest benefit is having control over your schedule, although you may need childcare if your kids aren't school age to get in your work hours.

Hi N.,
Yes, technically if you are receiving 1099 income (independent contractor), you have your own business and are self-employed.

Yes, you will be able to deduct your home office as your work place as long as your home office is used exclusively for work. Of course, you need to consult with your accountant for the deduction details.

If you are involved with an MLM, as long as you're receiving 1099 income, the home office deduction will apply because you have your own business.

Personally, the benefits are:
1. Having your own business & being your own boss.
2. Flexibility with your work schedule.
3. No employees, no overhead.
4. Minimal investment for your own franchise.
5. A proven system and compensation plan.
6. Creating residual income for the rest of my life.
7. Time freedom to spend with my family.
8. Leverage - so I'm not doing everything!
9. Getting paid to help other people.
10. Partnering up with a a strong ethical publicly-traded company that's been around for 25 years and experiencing exponential growth even in this economy.

That's all I can think of for now!
My business has been a true blessing for me and my family in this economy.

Yes ,you are considered a self-employed business owner and you can deduct any expenses. I'm a Mary Kay consultant. When I was in Canada, I was an admin. assistant and my husband was an engineer. Because of my Mary Kay business, we had the same take-home pay. My business expenses reduced my taxes and my husband paid a lot in tax, so we ended up taking home the same income, even though he made a lot more $ than I. There's an accountant in San Diego who has done taxes for Mary Kay women for 20 years and we use his sheet of expenses. And some women join MK just for the tax deductions. This should work for any stay-home business. And of course, there's the benefit of working your own hours and working around your children.

Make sure you have a good accountant and legal counsel....someone who KNOWS the IRS rules and regulations.

Yes, you can write off your home office, HOWEVER, with the IRS, there are a lot of strings attached to that which would limit other things you can no longer write off. Sometimes it is an either or situation and we chose the one with most benefit to us.

We do work from home, non-MLM (no offense we just don't buy into that type of business). We are consultants/brokers for raw materials so we have a lot of business expenses per month ($3000+) that we can legally submit, (ex: airfare, mileage, rental cars, hotels, business entertainment, office supplies, to name a few) ALWAYS.....cya... We save ALL receipts and can account for every penny we claim as expense. I have a "system" of processing our expense reports, each with detailed information and receipts to match up in case we are ever audited. Also, you have to make sure you pay your estimated taxes.

Get FACTS from IRS regarding home office and the rules you have to follow to see if it is worth it to you. Write down the pros and cons of it all then make your decision.

You can be self employed, financially stable, and on the right track with IRS. It takes a lot of discipline, time, planning and determination.

Good luck