The Tax Benefits of Being in Network Marketing

A lot of network marketing companies, (Also called MLM’s) get a bad wrap because they require minimum monthly purchases for the “right” to get paid on other people’s purchases. I’ve talked to a lot of individuals who feel it’s a lame business model for companies to make members pay for the right to make the company money.

While the minimum monthly membership is frustrating to many, the opportunity to make money by selling products is still enough to drive them to bite the bullet. What I want to point out in this article is that the tax benefits of belonging to a network marketing company are AMAZING — if you don’t know about them, then hopefully this makes that membership fee seem worth it!

For sake of explanation, I’ll use the MLM company my wife and I belong to (Young Living) in this post, and our projected write offs for the year 2017. Young Living is an MLM that sells primarily high grade essential oils. We have a $100 minimum monthly spend required in order to maintain the right to profit from selling their products.

Because we pay a membership to Young Living, the IRS will let us deduct over $9,000 in business expenses when we file a Schedule C form.

Here is a chart showing our projected write offs for this year. Each of these write offs is allowable under the current tax code.

We’ll deduct almost $10,000 in write offs this year. Since we’re in the 25% tax bracket, this will save us around $2,400 when we file our taxes for 2017. That’s more than 2x what the membership costs.

As you can see, the tax benefits of belonging to a network marketing company are epic. If you’d like to learn more about how these deductions work, and how to make sure you get them when you file…feel free to email me at danekurtz@me.com