Already on ArticleSlash?

Forgot your password? Sign Up

Income Tax and Your Network Marketing Business

Audrey Okaneko

Visitors: 118

Often I see the phrase “tax advantages" in ads for network marketing distributors. This phrase can be a bit misleading.

I always suggest consulting with a tax expert to learn what is and is not acceptable when filing taxes.

More than once I've had a potential new distributor come to me confused over taxes. They are worried about having to pay taxes on the money earned.

I do pay estimated quarterly taxes. The best way for me to explain this is to use a very rounded number. If you earn $1000 per year and if your tax bracket is 30%, you absolutely will owe the government $300 dollars. If you have deductions, then this number will go down, but without getting into deductions, right now you owe the government $300.

Please note in the above example, you'll have $700 in earnings. This is $700 you would not have had without the network marketing business. Yes, you paid $300 but you've kept $700.

Self discipline is a must. I know that each year I'll have to pay taxes on the money earned and so I automatically put away 30% of what I earn. If at the end of the year I've overpaid the government or over-saved, then I'll get a refund check just like others who work for employers and have overpaid.

I save all receipts and all bills associated with my business. I use the internet daily. I save my bill from Cox Cable, my internet provider. I subscribe to a few magazines. I save the bills from those subscriptions. I also save all invoices from the company I represent and I mark what was purchased for me, what was purchased as samples and what was resold to customers.

You can deduct part of your housing costs. However, once again, I suggest you meet with a tax expert as there are long term effects of declaring part of your house as a deduction.

There is quite a bit of information on small business taxes and home business taxes on the IRS website. Invest some time reading through this information.

Above all, remember that in order to owe money, you will have also made money.

Audrey Okaneko has been in direct sales since 1983. She can be reached at or you can Become a Tupperware Consultant


Article Source:

Rate this Article: 
Why Network Marketing is a Good Income Stream
Rated 4 / 5
based on 5 votes

Related Articles:

How to Turn Your Annual Income into Monthly Income Fast With Affiliate Network ..

by: Eugenia Wan (June 24, 2007) 
(Internet and Businesses Online)

Network Marketing Techniques - How To Use Email Marketing To Explode Your ..

by: Lynn McArthur (February 15, 2008) 
(Internet and Businesses Online/Email Marketing)

Network Marketing Tip - Tips For Introducing You Network Marketing Business ..

by: Justin Finkelstein (December 12, 2008) 
(Home Based Business/Network Marketing)

Network Marketing 5 Reasons You Should Use Article Writing in Your Network ..

by: Kim Rhodes (July 31, 2008) 
(Home Based Business/Network Marketing)

Additional Income Through Network Marketing

by: Kevin Germain (February 23, 2012) 

What is Network Marketing Or MLM? A Look at the Network Marketing Business ..

by: Matt Dillard (June 29, 2008) 
(Home Based Business/Network Marketing)

Network Marketing 5 Reasons to Use Twitter in Your Network Marketing Business

by: Kim Rhodes (July 29, 2008) 
(Home Based Business/Network Marketing)

Is Network Marketing a Good Way To Earn An Income?

by: Geoff Barraclough (January 04, 2007) 
(Home Based Business)

Top Residual Income Opportunity - Why Network Marketing is Your Best Bet?

by: Justin Finkelstein (December 12, 2008) 
(Home Based Business/Network Marketing)

Why Network Marketing is a Good Income Stream

by: Jeff Schuman (June 17, 2008) 
(Home Based Business/Network Marketing)