Proving To The IRS That Your Mlm Tax Deductions Are Legitimate, Part 2

In the first part of this text series, I checked out the factors the IRS makes use of to determine whether your Mlm tax deductions are professional based mostly in your "intent to supply a revenue." On this second article, I delve into a particular category of tax deductions: business travel bills.

The most important IRS Rule About Business Travel Expenses There's one major qualification in the case of determining whether your travel bills are tax-deductible in your Mlm business. Here is the rule:

If your corporation "requires you to sleep or relaxation away out of your precept place of business," then you may legally deduct your travel and associated expenses.

So what does this imply? Since you probably run your Mlm enterprise from your property office, the tax code lets you deduct journey expenses for any journey that takes you away from residence. That's easy sufficient. Business trip can embody transportation prices (airline tickets, practice tickets, or car rentals) plus associated bills like lodging, meals, and ideas.

Three Additional IRS Rules About Business Travel Expenses As all the time, the IRS cannot keep their guidelines simple. In addition to the main rule above, there are three other rules about enterprise travel that you could observe. Your trip should:

be regular and customary for your type of business

have the purpose of gaining a direct enterprise benefit

assist you in and be acceptable for growing and sustaining your business
In the Mlm trade, examples of trips that would qualify in accordance to these three guidelines embody journeys for trade shows, company trainings, prospecting conferences, and trainings you give.

Business Travel Expense Myth-Buster Yet one more notice earlier than you sprint off on your next business trip. MLMers are often tempted to justify any and all trips as "enterprise trips" by saying that every one people are prospects, thus all journeys are enterprise trips. The IRS isn't going to be happy with you when you follow this rule. To remain on the IRS's good side, ensure you could prove that a visit qualifies in accordance with the three rules above. The documentation can be as simple as emails between yourself and prospects who stay in the city to which you're traveling, as well as documentation that you truly met with these prospects (comparable to meal receipts).