Saying "no" to friends selling things/parties (Hawaii, house, IRS)
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Well, why don't these MLM companies just make products that people want to buy?
It's not the products, per se, but rather the MLM business model that inflates the price so that several levels all receive a cut. In many cases, in excess of 10 levels all receive a piece of the action, as well as corporate's share.
even as they're losing money themselves, the huns continue to try to lure new people in with promises of easy riches. Abandoning integrity and putting ethical behavior aside is a practical requirement of being a "boss babe".
Thats because they are trained that the "stud" recruit that will set their income on fire is always around the next corner.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by PriscillaVanilla
The tax write-offs are negligible unless the person earns a certain amount in the MLM. If someone earned only $200 all year long are they getting a huge tax write-off?
How many businesses do you use as deductions on your tax return?
I have (6) LLC's + 12 income props + (3) Farms NO MLM
ALL of which reduce wage / earned income. I have never paid over 9% effective rate IRS income tax (and I am in an income tax free state. less hassle at tax time).
The IRS likes you to be profitable every once in a while (that is achievable on occasion, as needed). Farms get much extra latitude since you need to grow trees / bushes / livestock... and build buildings and put in wells... and have a LOT of capital equip needs (accelerated depreciation works GREAT in bonus yrs. Ask the many who drive SUV's that they write off... (Not me, I have a $35 car that is 43 yrs old - it is fully depreciated . )
How many businesses do you use as deductions on your tax return?
I have (6) LLC's + 12 income props + (3) Farms NO MLM
ALL of which reduce wage / earned income. I have never paid over 9% effective rate IRS income tax (and I am in an income tax free state. less hassle at tax time).
The IRS likes you to be profitable every once in a while (that is achievable on occasion, as needed). Farms get much extra latitude since you need to grow trees / bushes / livestock... and build buildings and put in wells... and have a LOT of capital equip needs (accelerated depreciation works GREAT in bonus yrs. Ask the many who drive SUV's that they write off... (Not me, I have a $35 car that is 43 yrs old - it is fully depreciated . )
An MLM'er grossing $200 a year would have a hard time writing off the lease of a $50,000+ SUV, however they could write off the fuel/mileage incurred in grossing that $200 as long as that mileage relates strictly to selling those products. In the case of that $200, 50km of fuel might seem reasonable in the eyes of the IRS.
"Sorry, I paid my dues on the altar of Amway years ago. I have a strict no-MLM policy, it's nothing personal."
Amen,
So I wrote a post on the non romantic relationship board about my saga with a friend selling "Itworks" and trying to get me to host a party for her.
lol, I really believe the best thing about becoming a senior is that I don't fear losing "acquaintances".
My church has a few ladies hawking "it works".
like you I now have a strict" no mlm" policy. no hosting parties, no purchasing the product
An MLM'er grossing $200 a year would have a hard time writing off the lease of a $50,000+ SUV, however they could write off the fuel/mileage incurred in grossing that $200 as long as that mileage relates strictly to selling those products. In the case of that $200, 50km of fuel might seem reasonable in the eyes of the IRS.
In the 80s I successfully defended at audit a write-off of a couple thousand dollars of air travel and accommodation against an income of $100. It was a six month surf trip and I wrote one article which was purchased by Surfer magazine for $100. The auditor said this isn't a business. You lost way more money than you took in. My response was "I planned to sell more articles but it didn't happen. If it were a hamburger stand losing money would your argument be any more valid?" He said good point and closed the audit.
An MLM'er grossing $200 a year would have a hard time writing off the lease of a $50,000+ SUV, however they could write off the fuel/mileage incurred in grossing that $200 as long as that mileage relates strictly to selling those products. In the case of that $200, 50km of fuel might seem reasonable in the eyes of the IRS.
How much tax write off with 50 km of fuel, how does that translate into dollars?
To me, joining an MLM just for the tiny tax write-offs doesn't seem that profitable and wouldn't highly motivate me, personally, to join one. But people in these businesses boast all the time about their tax write-offs. I read somewhere that you can only claim tax write-offs in MLMs if you earn x amount of money. And it seems most do not earn that high.
A friend of mine described Amway and similar enterprises this way:
"You guilt your friends and relatives into buying your products, then, when you run out of friends and relatives, you go out of business."
Its the same with Cutco knives. High school kids sell it to all their friends and relatives, under the guise of learning salesmanship and commerce, until they’re used them up. At least they are awesome knives.
When I was a young mother, any excuse to get out of the house was welcomed. My neighbors and I went to these parties every month or so, for the social outlet and the inevitable dill dip. Everyone understood that if you didn’t buy anything it was fine.
The hostess got free stuff for booking the party, but the guests weren’t obligated to buy. I still think fondly of how we laughed at some of the off the wall Tupperware items. Who wouldn’t want an individual carrot container?
[quote=PriscillaVanilla;56268015]How much tax write off with 50 km of fuel, how does that translate into dollars?
But people in these businesses boast all the time about their tax write-offs.
Those same people also boast about earning $100k while working 2 hours a week. Both a pure bull. And the IRS is more than familiar with the tricks MLM'ers will try. Even the value of some of the "trips" they reward are considered a taxable benefit. But it's really a moot point because the average MLM'er joins, spends $200-$400 and is lucky to receive $30 in commissions, before leaving. The tax benefits offered by MLM is about the same a having a weekly small paper route in a small town on a 2 house street. The big difference is, a paper carrier doesn't have to pay a sign-up fee.
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