ribshaw
09-18-2013, 08:47 PM
I don't know this guy, but he has some good videos on subjects folks who visit REALSCAM.COM might find interesting. For all I know he may post here, I do know his work has been mentioned in the past.
Ethan Vanderbuilt - YouTube (http://www.youtube.com/channel/UCnUp0YvqUNVOb1aaIz4BWZg)
Ethan Vanderbuilt | One Voice Can Change The World (http://ethanvanderbuilt.com/)
I stumbled on this:
http://www.youtube.com/watch?v=zaOLQU965n8&feature=c4-overview-vl&list=PLrbz7q4iJpRGRh3cPY0yv4oELcADsx5Mj
For me it is not even a question go to college, or get a good technical skill. Either will let you start your own business, and both will give options to fall back on if things go sideways. If you go MLM and it doesn't work, you may or may not have a viable fall back. Unless your family is rich, go to community college and a state school, keep your debt low and grades high. (My 2 Cents)
Here is what I find the most troubling about this conversation and maybe perhaps MLM in general. Guy shows up with the rah rah stuff, fine that is to be expected. But then he starts throwing around the LIES about having your own business being some tax promised land. Ala, Robert Kiyosaki best debunked here: John T. Reed's analysis of Robert T. Kiyosaki's book Rich Dad, Poor Dad (http://www.johntreed.com/Kiyosaki.html)
There are clearly some advantages to having your own business like being able massively fund certain retirement plans, but you need INCOME to do that. For the most part standard stuff as outlined by the IRS is deductible, like "Cost of Goods Sold". As a practical matter, I know people play games with it, but most are not so clumsy as to put it in writing on the internet.
MLM guys tax scenario isn't even up for discussion, it is flat out wrong. Took a 5 second google search to find the IRS guidelines on how to treat business expenses. MLM guy claims to have a degree in Accounting and to have worked for a CPA firm for 3 years. Notice he did not say he was a CPA!!! Assuming he has an "international MLM business" just who is he giving advice to? All those kids that skipped college and bought Choose to be Rich? Keeping in mind this is mainstream MLM advice that has sold millions of books. Think about this if you are making a decision, does a roofer need to know code, a pharmacist drug interactions? If you are reading this and truly trying to make a life decision, go back and independently verify what you are being told.
Cheating on your taxes is like a lot of things, if you are dead broke to begin with your chances of an audit are smallish. As Ethan points most MLM experiences end with losses or very little income. But, if you build a successful business and pulled this crap along the way, huge audit risk.
5917
5918
5919
5920
5916
Deducting Business Expenses
Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit.
What Can I Deduct?
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
It is important to separate business expenses from the following expenses:
The expenses used to figure the cost of goods sold,
Capital Expenses, and
Personal Expenses.
Cost of Goods Sold
If your business manufactures products or purchases them for resale, you generally must value inventory at the beginning and end of each tax year to determine your cost of goods sold. Some of your expenses may be included in figuring the cost of goods sold. Cost of goods sold is deducted from your gross receipts to figure your gross profit for the year. If you include an expense in the cost of goods sold, you cannot deduct it again as a business expense.
The following are types of expenses that go into figuring the cost of goods sold.
The cost of products or raw materials, including freight
Storage
Direct labor costs (including contributions to pensions or annuity plans) for workers who produce the products
Factory overhead
Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Indirect costs include rent, interest, taxes, storage, purchasing, processing, repackaging, handling, and administrative costs.
This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million.
For additional information, refer to the chapter on Cost of Goods Sold, Publication 334, Tax Guide for Small Businesses and the chapter on Inventories, Publication 538, Accounting Periods and Methods.
Capital Expenses
You must capitalize, rather than deduct, some costs. These costs are a part of your investment in your business and are called capital expenses. Capital expenses are considered assets in your business. There are, in general, three types of costs you capitalize.
Business start-up cost (See the note below)
Business assets
Improvements
Note: You can elect to deduct or amortize certain business start-up costs. Refer to chapters 7 and 8 of Publication 535, Business Expenses.
Personal versus Business Expenses
Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part.
For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible. Refer to chapter 4 of Publication 535, Business Expenses, for information on deducting interest and the allocation rules.
Business Use of Your Home
If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. Refer to Home Office Deduction and Publication 587, Business Use of Your Home, for more information.
Business Use of Your Car
If you use your car in your business, you can deduct car expenses. If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage. Refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses. For a list of current and prior year mileage rates see the Standard Mileage Rates.
Other Types of Business Expenses
Employees' Pay - You can generally deduct the pay you give your employees for the services they perform for your business.
Retirement Plans - Retirement plans are savings plans that offer you tax advantages to set aside money for your own, and your employees' retirement.
Rent Expense - Rent is any amount you pay for the use of property you do not own. In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. If you have or will receive equity in or title to the property, the rent is not deductible.
Interest - Business interest expense is an amount charged for the use of money you borrowed for business activities.
Taxes - You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses.
Insurance - Generally, you can deduct the ordinary and necessary cost of insurance as a business expense, if it is for your trade, business, or profession.
This list is not all inclusive of the types of business expenses that you can deduct. For additional information, refer to Publication 535, Business Expenses.
Page Last Reviewed or Updated: 2013-09-11
Deducting Business Expenses (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses)
Ethan Vanderbuilt - YouTube (http://www.youtube.com/channel/UCnUp0YvqUNVOb1aaIz4BWZg)
Ethan Vanderbuilt | One Voice Can Change The World (http://ethanvanderbuilt.com/)
I stumbled on this:
http://www.youtube.com/watch?v=zaOLQU965n8&feature=c4-overview-vl&list=PLrbz7q4iJpRGRh3cPY0yv4oELcADsx5Mj
For me it is not even a question go to college, or get a good technical skill. Either will let you start your own business, and both will give options to fall back on if things go sideways. If you go MLM and it doesn't work, you may or may not have a viable fall back. Unless your family is rich, go to community college and a state school, keep your debt low and grades high. (My 2 Cents)
Here is what I find the most troubling about this conversation and maybe perhaps MLM in general. Guy shows up with the rah rah stuff, fine that is to be expected. But then he starts throwing around the LIES about having your own business being some tax promised land. Ala, Robert Kiyosaki best debunked here: John T. Reed's analysis of Robert T. Kiyosaki's book Rich Dad, Poor Dad (http://www.johntreed.com/Kiyosaki.html)
There are clearly some advantages to having your own business like being able massively fund certain retirement plans, but you need INCOME to do that. For the most part standard stuff as outlined by the IRS is deductible, like "Cost of Goods Sold". As a practical matter, I know people play games with it, but most are not so clumsy as to put it in writing on the internet.
MLM guys tax scenario isn't even up for discussion, it is flat out wrong. Took a 5 second google search to find the IRS guidelines on how to treat business expenses. MLM guy claims to have a degree in Accounting and to have worked for a CPA firm for 3 years. Notice he did not say he was a CPA!!! Assuming he has an "international MLM business" just who is he giving advice to? All those kids that skipped college and bought Choose to be Rich? Keeping in mind this is mainstream MLM advice that has sold millions of books. Think about this if you are making a decision, does a roofer need to know code, a pharmacist drug interactions? If you are reading this and truly trying to make a life decision, go back and independently verify what you are being told.
Cheating on your taxes is like a lot of things, if you are dead broke to begin with your chances of an audit are smallish. As Ethan points most MLM experiences end with losses or very little income. But, if you build a successful business and pulled this crap along the way, huge audit risk.
5917
5918
5919
5920
5916
Deducting Business Expenses
Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit.
What Can I Deduct?
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
It is important to separate business expenses from the following expenses:
The expenses used to figure the cost of goods sold,
Capital Expenses, and
Personal Expenses.
Cost of Goods Sold
If your business manufactures products or purchases them for resale, you generally must value inventory at the beginning and end of each tax year to determine your cost of goods sold. Some of your expenses may be included in figuring the cost of goods sold. Cost of goods sold is deducted from your gross receipts to figure your gross profit for the year. If you include an expense in the cost of goods sold, you cannot deduct it again as a business expense.
The following are types of expenses that go into figuring the cost of goods sold.
The cost of products or raw materials, including freight
Storage
Direct labor costs (including contributions to pensions or annuity plans) for workers who produce the products
Factory overhead
Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Indirect costs include rent, interest, taxes, storage, purchasing, processing, repackaging, handling, and administrative costs.
This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million.
For additional information, refer to the chapter on Cost of Goods Sold, Publication 334, Tax Guide for Small Businesses and the chapter on Inventories, Publication 538, Accounting Periods and Methods.
Capital Expenses
You must capitalize, rather than deduct, some costs. These costs are a part of your investment in your business and are called capital expenses. Capital expenses are considered assets in your business. There are, in general, three types of costs you capitalize.
Business start-up cost (See the note below)
Business assets
Improvements
Note: You can elect to deduct or amortize certain business start-up costs. Refer to chapters 7 and 8 of Publication 535, Business Expenses.
Personal versus Business Expenses
Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part.
For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible. Refer to chapter 4 of Publication 535, Business Expenses, for information on deducting interest and the allocation rules.
Business Use of Your Home
If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. Refer to Home Office Deduction and Publication 587, Business Use of Your Home, for more information.
Business Use of Your Car
If you use your car in your business, you can deduct car expenses. If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage. Refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses. For a list of current and prior year mileage rates see the Standard Mileage Rates.
Other Types of Business Expenses
Employees' Pay - You can generally deduct the pay you give your employees for the services they perform for your business.
Retirement Plans - Retirement plans are savings plans that offer you tax advantages to set aside money for your own, and your employees' retirement.
Rent Expense - Rent is any amount you pay for the use of property you do not own. In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. If you have or will receive equity in or title to the property, the rent is not deductible.
Interest - Business interest expense is an amount charged for the use of money you borrowed for business activities.
Taxes - You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses.
Insurance - Generally, you can deduct the ordinary and necessary cost of insurance as a business expense, if it is for your trade, business, or profession.
This list is not all inclusive of the types of business expenses that you can deduct. For additional information, refer to Publication 535, Business Expenses.
Page Last Reviewed or Updated: 2013-09-11
Deducting Business Expenses (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses)