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January 25, 2007
Tax Time again
By Drew in Miscellaneous
Yes it is that time of year again and everyone I am sure is excited to do their taxes. The wonderful task of figuring out how much you are going to get or how much you are going to give is always enough to put a smile on your face.
I remember doing taxes while I was in Quixtar and the excitement that many IBOs would have about all the deductions they were going to take and how that was going to amount to a big payday for them. My wife and I however were never excited about this. Now don't get me wrong deductions are always nice in taxes, but having a big payday pretty much meant our business had a bad year. Bad year meaning we most likely spent much more then we made.
This is an area every IBO needs to deal with and they should do so with great care. The IRS has many rules and restrictions on the deductions many IBOs take and even has some rules about the difference between a hobby and a business, and yes some IBOs qualify under the hobby. I think (actually more like hope) everyone understands the serious potential consequences of taking deductions you were not allowed and later being audited.
My suggestion is to not take any advice from your upline on this one unless they are certified when it comes to taxes. I would recommend either studying for yourself the rules on the deductions you plan on taking, or solicit the help of a tax professional who can assist you. Hopefully you kept good records for your planned deductions.
I am no tax professional by any stretch of the imagination but I did a podcast last year on this subject and passed on some of the information I learned after doing my own research. You can listen to that below to get an idea of some of the things you may want to watch for this year when doing your taxes.
Good luck everyone and may your tax liability be as small as you can make it.
Comments
u negative ppl!!
u eat out while showing the plan, it's right off. You gonna eat any way. Here u get to right it off, Who is yo daddy?
If I'm not going to ask my upline, why should I listen to you?
I would advise someone to study the IBO bookkeeping tool which will give specifics on how to complete your taxes as an IBO.
You're right. You shouldn't be excited about getting a huge refund, because that means you're not making any real money.
I also wouldn't go to a CPA who has no experience with Amway or Quixtar. I would get in contact with my Upline Q12 and above and find out if they use a specific accountant and then give that person a call.
"If I'm not going to ask my upline, why should I listen to you?"
Where did I say someone should listen to me? Perhaps if you are going to make that claim it would be wise to actually be able to back it up. My advice is simply do the research yourself of solicit the help of someone who knows what they are doing. My podcast is simply research of things I have found out and gives an IBO an idea of the kinds of things they need to be mindful of.
May I suggest next time you actually read and listen and not just pull conclusions out of the air that are not true.
Brad,
No, audits are not all bad, but if you are not keeping good records and you are taking deductions that you cannot prove an audit is going to feel like hell on earth. Interesting though how IBOs don't want to talk about that.
Drew,
Who ARE you? You put your Podcast on this website like you really know what you're talking about. Maybe you do? Maybe you don't? Were you ever making enough as an IBO to actually know what you're talking about?
My problem is that many of the critics who post here don't really know what their talking about. Then you post on this site like you all are experts. Are you?
There you go again making claims that you cannot back-up. This is becoming a habit with you. But since you insist now I am going to hold your feet to the fire.
I stated clearly in the post and said in the podcast that I am not an expert. I have also stated that the purpose of the podcast was to share information that I had found during research that applied to IBO businesses. So I did a podcast and shared what I had found to give IBOs an idea of some of the things they need to watch when doing their taxes and taking certain deductions.
But since you can't get that through your head and you blindly want to continue on course let's see if you can put up.
Find for me where in my post or podcast I claimed to be an "expert". Then find for me where anyone who writes on this blog called themselves "expert".
The only person I know to falsely claim expert status is a Quixtar supporter. But if you can find it please do show us, otherwise I think you might want to understand what you are talking about before you have diarrhea of the keyboard again.
You supporters love to come here telling us we don't know what we are talking about, but it all ends there. You love to make the claim you just can't seem to actually back it up.
Xtra, my husband received so much misleading and dowright false 'information' from his upline regarding our income taxes that I finally had to refuse to file jointly if he was going to file according to their advice (as opposed to the Internal Revenue Code).
I advise you to consult an advisor who deals with IBOs and then consult one who doesn't. Compare and contrast the possibly conflicting advice you receive with the information at IRS.gov.
I definately used a CPA when I filed my taxes as an IBO. To give my upline credit, I was able to write off everything they told me I could, including a few things I didn't realize could be written off. If this is your first time dealing with taxes as an IBO, I implore you to seek a professionals help. Ask your platinum who they reccomend to help you. My platinum used a CPA who had a lot of experince with MLM and Amway.
Next, decide where that tax return could really serve YOU best. Not your team. During the New Years party my silver talked about the upcoming tax season and the refunds that people would be getting. They spent the entire time talking about how you could use the money to help your team by buying extra tapes, kits, functions tickets, etc. They NEVER mentioned paying off any debt or catching up on those maxed out credit cards.
My sponsor and Upline both are CPA. How cool is that!
Hey, Imran! That makes you a double-bean. :-)
Xtra,
You said "...Were you ever making enough as an IBO to actually know what you're talking about?"
Could you please tell us how much an IBO should be making to be worthy of being listened to? What's "enough"? What's the magic $$$ number?
BB,
Let's start with more than the "average income" stat so many of you critics like to use.
Its a good starting point because an idiot should be able to at least make that much with little to no effort at all. Unfortunately, so many of you critics failed, and were never even "average".
Quixtar has put up a Q/A section on tax time issues under the: "New in Business" section of the website. It provides some good Q/A's as well as resources in addition to that which I provided above.
Re Drew: I seem willing to talk about it. And contrary to what you seem to portray, I have found some very thorough and innovative ways of keeping track of expenses for an IBO with Quixtar. One sheet was available around the yr 2000 for Excel. If you wanted something like this, you could have found it. I'm all for asking upline for help and advice, but process it through a brain cell or two and then make up your own mind. After all, you are the one ultimately responsible for your business. Thanks for the spotlight on the important issue of taxes.
Dear podcasters, please add "Chapters" in ur podcast. Makes it lot easier when u r listening it on iPod. e.g. if Eric is talking about say new song, I can skip it. Also, make it easier to remember where I was etc.
Ok, Xtra...
I was making way more than an average AmQuix income starting about my 2nd or 3rd month in the business and then for many years thereafter. According to you, that qualifies me as someone worth listening to. As such, I affirm - and now you have to listen to me because you yourself set the criteria - that Drew's podcast is right on the money. See, even if Drew had never made a single red cent in the business, you now have to accept his podcast as worth listening to, because someone else (me) who qualifies in your book to be worth listening to deemed the podcast to be accurate. Congratulations! Now put your headsets on, crank up the volume, and avail yourself of some wonderful and worthy knowledge that Drew had gone into trouble providing. I know it's hard for you to see it now, but trust me (and remember, you are listening to me now!) that one day you'll be thankful for the information you heard.
P.S. your lack of response to Drew's challenge to provide any backing for your earlier claims is quite telling. In fact, I think we'll just consider your silence to be the final response. Save you some additional embarrassment that way...
Geez Xtra, your genuinely "positive" attitude" is sure to attract many an IBO. As a matter of fact, I bet people come up to you and ask you if they can be your new trusted friend because you have all the experiences and answers on how to be positive and attract them. You could make more profit if you resell your CDs that give you useless info to an unknowing new IBO. What tells me that you are average is that you think you can become a "rich Diamond" in an organization that promotes debt. As for us critics, from what I've encountered, they have always been outstanding people who are smart enough to know when the bull$^!+ is just way too deep.
I love it when IBOs talk about how much theyre making from quixtar and then in the same sentence, they mention that they now get huge tax returns from their business write offs.
:D
Hey - got my big fat tax return today!!!
Of course, my biggest deduction was charitable giving (ya know, once a week adds up over a year) - not overpriced tools.
BUT I'M SURE THOSE $10,000 CHECKS TO CHARITY THAT IBO'S BRAG THEY ARE GONNA WRITE ARE COMING REAL SOON!!!!!!!!
Sources for IBOs -
http://www.iboai.com/Resources-IBOBookkeeping101-JoeDePetris.asp
This page on the IBOAI website provides the book "Bookeeping 101," for FREE, and a link to the IRS' take on Direct Selling. At the end of the IRS document, go through the "9 factors and analysis" to see if you are running a business or hobby. It will be a good start in learning about taxes.
This is a good chance for you to ask your upline about taxes and how he/she filed them last year as well as the records they have kept. Bounce that off of these sources and look through the IRS website for more in depth information about tricky areas: car, home, how to label expenses. And don't lump everything into miscellaneous expenses, that is a red flag!
How did I learn what to do? Read through IRS, IBO Bookeeping, and became a certified tax preparer. You can do it with volunteer organizations and not only do you get to help others with their taxes, you get much better at them yourself. Just an idea.
Tax season and audits are not as doom-and-gloom as Drew makes them seem. In fact, a respected business owner I know, outside of Quixtar, got audited his 2nd year in business as an independent contractor. He said it was the best thing to happen. When he was audited again 3 years later, they actually owed HIM money because he knew the tax code so much better.
Posted by: Brad | January 25, 2007 2:44 PM