| In the first part of this article series, I looked at the | | | | rules about business travel that you must follow. Your |
| criteria the IRS uses to determine whether your MLM | | | | trip must: |
| tax deductions are legitimate based on your "intent to | | | | 1. be usual and customary for your type of business |
| produce a profit." In this second article, I delve into a | | | | 2. have the purpose of gaining a direct business benefit |
| specific category of tax deductions: business travel | | | | 3. assist you in and be appropriate for developing and |
| expenses. | | | | maintaining your business |
| The Major IRS Rule About Business Travel Expenses | | | | In the MLM industry, examples of trips that would |
| There's one major qualification when it comes to | | | | qualify according to these three rules include trips for |
| figuring out whether your travel expenses are | | | | trade shows, corporate trainings, prospecting meetings, |
| tax-deductible for your MLM business. Here is the rule: | | | | and trainings you give. |
| If your business "requires you to sleep or rest away | | | | Business Travel Expense Myth-Buster |
| from your principle place of business," then you may | | | | One more note before you dash off on your next |
| legally deduct your travel and related expenses. | | | | business trip. MLMers are often tempted to justify any |
| So what does this mean? Since you probably run your | | | | and all trips as "business trips" by saying that all people |
| MLM business from your home office, the tax code | | | | are prospects, thus all trips are business trips. The IRS |
| allows you to deduct travel expenses for any trip that | | | | isn't going to be happy with you if you follow this rule. |
| takes you away from home. That's simple enough. | | | | To stay on the IRS's good side, be sure that you can |
| These travel expenses can include transportation | | | | prove that a trip qualifies according to the three rules |
| costs (airline tickets, train tickets, or car rentals) plus | | | | above. The documentation can be as simple as emails |
| related expenses like lodging, meals, and tips. | | | | between yourself and prospects who live in the city to |
| Three Additional IRS Rules About Business Travel | | | | which you are traveling, as well as documentation that |
| Expenses | | | | you actually met with those prospects (such as meal |
| As always, the IRS can't keep their rules simple. In | | | | receipts). This proves that you are taking the trip to |
| addition to the major rule above, there are three other | | | | "gain a direct business benefit. |