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Network Marketing Expense GuideIN PARTNERSHIP WITH LEBEAU & ASSOCIATESThere are a variety of tax deductible items available for the self-employed. Income taxes andself-employment taxes are usually the biggest single expenses for the small business owner. Keepcareful records of your expenses and be aware of what deductible items are available and you cangreatly increase your net income. As a CPA that specializes in home based and small businesses, I canget you pointed in the right direction so you can have more of your hard earned money stay in yourhousehold. 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 HomeIf you are running a business from your home, a percentage of the costs of owning or renting may bedeductible. The tax deductions for a home-based business are generally calculated by dividing theexclusive and regular business use area by the total living area of your home. The business space doesnot have to be a full room, but it absolutely must be exclusive. You cannot use the area at any time forpersonal 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, thenyour deductible percentage is 200/2000 or 10%. (Note that daycare businesses will use a formulabased 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 home1
Network Marketing Expense GuideIN PARTNERSHIP WITH LEBEAU & ASSOCIATESBusiness Use of Your Personal VehiclesAnother of the potentially large deductible self-employed business expenses is the business use oftheir personal passenger vehicles.There are basically two ways to calculate this. Calculate the deduction both ways the first year to seewhich one will give you the biggest deduction. For either method, you must keep a log of yourbusiness mileage to substantiate the deductions.Method 1: Standard Mileage DeductionThe standard business mileage deduction for 2019 is $.57.5/mile (but be sure to check for mid-yearchanges). If your business is home-based, then virtually all business mileage is deductible. If yourbusiness is not home-based, then you may not take a deduction for the mileage from your hometo your principal place of business. Any other business related mileage should be deductible. Thisincludes mileage to pick up supplies, to do your business banking, to make deliveries, to visitpotential customers, to the post office, to meet with the accountant or attorney, and to stores orbusiness suppliers.Standard mile deduction_________________miles x 0.58 per mile= $ _________________Method 2: Actual Vehicle ExpensesThis is based on the percentage of business use of your vehicle. For example, if you drove a total of10,000 miles in 2017 and 2000 of those were deductible business miles, then 20% of the vehicleexpenses 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 accountant2
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