TEST BOOK

Network Marketing Expense Guide
IN PARTNERSHIP WITH LEBEAU & ASSOCIATES

Network Marketing Expense Guide
IN PARTNERSHIP WITH LEBEAU & ASSOCIATES
There are a variety of tax deductible items available for the self-employed. Income taxes and
self-employment taxes are usually the biggest single expenses for the small business owner. Keep
careful records of your expenses and be aware of what deductible items are available and you can
greatly increase your net income. As a CPA that specializes in home based and small businesses, I can
get you pointed in the right direction so you can have more of your hard earned money stay in your
household. If you have questions or would like to set up a consultation please contact Craig LeBeau,
CPA at (208) 898-0500 or email at craig@lebeaucpa.com.
Tax Deductible Items for the Self-Employed can include:
Office in the Home
If you are running a business from your home, a percentage of the costs of owning or renting may be
deductible. The tax deductions for a home-based business are generally calculated by dividing the
exclusive and regular business use area by the total living area of your home. The business space does
not have to be a full room, but it absolutely must be exclusive. You cannot use the area at any time for
personal use, even if the personal use is just a day or two of the year.
For example, if your home office is 200 square feet and your home is a total of 2000 square feet, then
your deductible percentage is 200/2000 or 10%. (Note that daycare businesses will use a formula
based on the number of hours they make the home available to the children).
Square Footage of Office: _________________ Divided by: Total Square Footage __________________
Percentage Allowed: ______________________
Common tax deductible expenses for a home based business:
__________________ Mortgage interest, real property taxes, PMI insurance
__________________ Utilities, such as natural gas, electric, propane
__________________ Trash service, pest control service
__________________ Home insurance
__________________ Regular maintenance of the home
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Network Marketing Expense Guide
IN PARTNERSHIP WITH LEBEAU & ASSOCIATES
Business Use of Your Personal Vehicles
Another of the potentially large deductible self-employed business expenses is the business use of
their personal passenger vehicles.
There are basically two ways to calculate this. Calculate the deduction both ways the first year to see
which one will give you the biggest deduction. For either method, you must keep a log of your
business mileage to substantiate the deductions.
Method 1: Standard Mileage Deduction
The standard business mileage deduction for 2019 is $.57.5/mile (but be sure to check for mid-year
changes). If your business is home-based, then virtually all business mileage is deductible. If your
business is not home-based, then you may not take a deduction for the mileage from your home
to your principal place of business. Any other business related mileage should be deductible. This
includes mileage to pick up supplies, to do your business banking, to make deliveries, to visit
potential customers, to the post office, to meet with the accountant or attorney, and to stores or
business suppliers.
Standard mile deduction_________________miles x 0.58 per mile= $ _________________
Method 2: Actual Vehicle Expenses
This is based on the percentage of business use of your vehicle. For example, if you drove a total of
10,000 miles in 2017 and 2000 of those were deductible business miles, then 20% of the vehicle
expenses are deductible.
This will include:
__________________ Purchase Price (Depreciation of the purchase cost of the vehicle)
__________________ Insurance
__________________ Interest
__________________ Auto license plate fees
__________________ Oil changes and other regular maintenance
__________________ Car washes
__________________ Gasoline or other fuel
__________________ Repairs - these may need to be depreciated. Check with your accountant
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Network Marketing Expense Guide
IN PARTNERSHIP WITH LEBEAU & ASSOCIATES
Other Potential Self-Employed Expenses
(This is not an "all inclusive" list but some of the most commonly used expenses among homebased businesses.)
_________ Advertising
_________ Commissions paid
_________ Contract Labor
_________ Interest on a business loan
_________ Parking and tolls for business travel
_________ Equipment purchases - usually are depreciated or expensed with a Sec 179 deduction accounting
and legal fees for the business
_________ Health insurance premiums - special rules apply. (Deduct on the front of Form 1040.) Office supplies
_________ Business liability insurance
_________ Rent of business equipment
_________ Rent or lease of storage facilities
_________ Rent or lease of business space
_________ Maintenance and repairs of equipment or business space
_________ Shop supplies
_________ Business property taxes
_________ Business travel - hotel, parking, air and bus fares, taxis
_________ Internet service (percentage of business use)
_________ Web site hosting, design, and domain names
_________ Cell phones (percentage of business use)
_________ Telephone - the first line in a home is usually not deductible. A second line for business or a business
fax machine is deductible.
_________ Long distance phone charges and phone cards for business calls
_________ Books, newspapers, magazines for business purposes
_________ Association and membership fees
_________ Meals and entertainment (these are usually only 50% deductible)
_________ Cost of inventory items that sold (do not include unsold inventory)
_________ Merchant fees for your credit card sales
_________ Bank service charges on your business accounts
_________ Depreciation on the cost of furniture and equipment
_________ Answering services
_________ Postage and shipping
_________ Education and seminars
_________ Customer gifts
_________ Software purchases
_________ Software subscriptions, such as security software
_________ Commissions paid out
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