Read this blogpost by a WWDB IBO. I can see the flaw in what is being said. Can you?
http://expeditionoftruths.com/2010/06/22/cost-of-business/
So I was thinking this past weekend, as we were booking our flights to Portland for this year’s Family Reunion, the costs to run our business. Now being a sceptical person I keep records for every single expense related to our business and keep a running total to make sure that we are actually making money over what we spend to run our business. I do not include the products we buy because 95% of the products we buy are products that we already bought before. Examples, Multi-Vitamin, Protein Bars, Granola Bars, Water, Energy Drinks, Cleaning products, etc.. That’s all stuff we bought and as a business owner you shop from your own store.
So going back to our hard business costs such as our voicemail system, our digital audio files, books, any business related marketing tools, conferences that we attend, local functions that we go to… ALL of that are for the most parts the cost of doing business. I may break it down at the end of the year but probably not because our costs of doing business will differ from other people’s because not everyone uses all the tools and people build different business’s. However the best thing about all of that, 100% tax write offs. We did our taxes last year and were able to write off every thing that was related to our business. That even includes any samples we gave and KM’s we drove to any meetings that we had. We basically got a cheque back from the government and that cheque covered ALL our costs. So those who say “the tools are a scam”, well I don’t know what to tell you but as a cost of business they were covered by my cheque back from the government.
However having said all of that what business do you know doesn’t cost money to run? Last time I checked it costs traditional business’s like McDonalds, Shoppers Drug Mart, Banana Republic, Gap, etc… TEN of THOUSANDS of dollars a month to operate. They also have employees to manage and pay, lease payments for a building, and a whole whack of other expenses to pay out. We have roughly a FEW thousand dollars to run and 1000% less headache to worry about. Based on that it just makes sense and honestly how can you argue that. I’m sure you’ll try, however this is my own experience and what we are doing. What others do or claim to have done may or may not be what was recommended or advised and if you read it, take it with a grain of salt.
So to wrap it up, does this business cost money to run? Absolutely! Do you get to write it off on taxes? YES. I did it, I got the cheque! Next year when I file, I’ll post the cheque as proof for the seeing is believing folk out there. All business’s cost money to run, just depends on what kind of business your in
Shaun's comment and clarification:
"They didn’t give me a cheque specifically for my business related materials. I get to deduct my business related expenses against my taxable income like you said. I did our regular job taxes first and after that I wasn’t really getting a refund. However after I started to add in all our business related expenses that’s where our refund came which pretty much covered our business expenses for the 7 months we were in business last year"
1. My take: He was running a substantial net operating loss for the fiscal year in his Amway, which was credited against what had already been assessed by the Canadian Feds in withholding and payroll taxes from his J.O.B. paychecks.
ReplyDelete2. Another red flag is that he seems to think there is a dollar for dollar reduction in tax liability for business expenses - wow. Certainly not the case in the U.S.; probably the same for Canada.
---Daniel
Yet Shaun insists he is building this business on "integrity". Ironically, the people that Shaun thinks are full of integrity are the very ones who once upon a time lied outright to tens of thousands of people when they said nobody made money on tools.
ReplyDeleteShaun is clueless: The IRS is onto Amway for the scam that it is. Read their ruling against a number of Amway distributors (including Randall and Kay Ollett), based on the IRS Code for legitimate business expenses:
ReplyDeletehttp://dissidentvoice.org/Jan05/Pringle0102.htm
As an accountant myself, I highly recommend that Ambots read the following before blithely claiming all their expenses as "business deductions:.
What Constitutes A Legitimate Business-Related Expense?
Under rules in the Federal Tax Code, Section 162 provides that a taxpayer who is carrying on a trade or business may deduct ordinary and necessary expenses incurred in connection with the operation of the business. The Olletts had the burden of proving entitlement to a business expense deduction. The deductibility of their Amway expenses depended on whether their activity was engaged in for profit.
In determining whether an activity is engaged in for profit, Section 183 provides a list of factors for the court to consider: (1) The manner in which the taxpayer carried on the activity; (2) the expertise of the taxpayer or his advisers; (3) the time and effort expended by the taxpayer in carrying on the activity; (4) the expectation that the assets used in the activity may appreciate in value; (5) the success of the taxpayer in carrying on other similar or dissimilar activities; (6) the taxpayer�s history of income or losses with respect to the activity; (7) the amount of occasional profits, if any, which are earned; (8) the financial status of the taxpayer; and (9) elements of personal pleasure or recreation.
After considering these factors, the court determined that the Olletts did not have an actual and honest objective of making a profit, in part because: (1) they did not have any sales experience prior to becoming distributors and yet they relied solely on their upline for advice and training; (2) they did not seek independent business advice at the beginning of their venture to assess its potential for success; and (3) they did not seek advice on turning around years of operating losses.
But most importantly, the court said, the Olletts reported no significant revenue from their Amway activity and no reason for them to believe they ever were going to have any significant revenue from this activity.
Hi,
ReplyDeleteI just checked the dissidentvoice.org site and read its profile. In its profile it describes some of its people as 'average dude' and 'merry agitator'. So much for its credibility it's pathetic! Nah, I'll pass! Amway, here I come!
huh?
ReplyDeleteThe issue I have with the people in my fiance's upline is that the basically convinced her that she can write everything she does off as a business expense, and I know that bullshit would get you audited so easily, and secondly laws pertaining to business state that you must turn a profit within two years to have a legitimate business.
ReplyDelete