Picture this: you’re a direct seller or multi-level marketer, but you’ve received some about what expenses you can write off as direct seller tax deductions and now… you’re not sure (and maybe even feeling a little paralyzed).
Does that sound familiar?
Yes? Then you’re in the right place! I work with creative small business owners and soloproneurs (including direct sellers), and I wanted to share some information to help you out!
Because I know that when you take the time to learn all about your business tax deductions, you’ll likely benefit to the tune of thousands a year–and who doesn’t want that?
But, first things first…
You’re going to see there are several items on the list below that are marked with an asterisk. Just know that expenses are more complex direct seller tax deductions that will require a little extra work on your part.
If you plan on taking the tax deductions with an asterisk, please make sure that you understand all of the requirements of these deductions, and keep very precise records to ensure that these deductions are never challenged by the IRS. (Feel free to contact me if you have questions about these deductions.)
So, let’s get going! Here’s a helpful list of the essential business expenses that can be written off in the direct marketing industry.
List of Direct Seller Tax Deductions:
- Professional dues and licenses (such as membership fees to your Chamber of Commerce or a city business license)
- Professional subscriptions
- Inventory you sell to customers within the calendar year (does NOT include anything you personally consume or use – can read more here about Section 262) *
- Samples of inventory (this does NOT include any you or your family personally use) *
- If you have a website, your blog theme and purchased plug-ins
- Your hosting (such as BlueHost)
- Your domain
- Any web design services or maintenance
- Professional photography for promotional materials (like a headshot or fitness shots)
- Professional videography for promotional materials or training you offer clients
- Professional conferences and workshops admission (local and far)
- Lodging, transportation & travel costs to professional events *
- Graphic design
- Purchased fonts and stock photography for website or marketing materials
- Food (for hosted gatherings, selling parties, open houses, etc.) *
- Cell phone
- Continued education
- Editing of photos and videography for marketing or educational materials you put out to the public *
- Virtual assistants
- 1099 subcontractor staff
- Payroll processing (need a recommendation? try Gusto Payroll – more here)
- Interest fees
- Bank fees
- Professional e-courses that will elevate your skills for running and growing your business
- Giveaways *
- Materials for photos & film shoots (job materials) *
- Commissions paid out
- Bookkeeping software (such as QuickBooks Onlineor FreshBooks)
- +25 more direct seller tax deductions (download your beautiful, free checklist to get access to these additional 25 deductions below)
To get the complete tax deduction list with 25 more direct seller tax deductions, make sure you download your free checklist here:
Now you may be thinking “Hey, what about the products I use to show my clients this really works?”
You might be tempted to think, “Of course I can write off my workout drinks to show they give me energy,” or, “I need to be wearing my makeup line and can write it off because I’m a model of how it works.”
No, sorry. I mean, hopefully if you’re selling something like a workout drink or makeup line, you believe in the product and love it enough to be using it yourself. But, your personal use of it is not enough to justify it as a business expense.
Why? Well Section 262 of the IRS doesn’t allow us to take any deductions for personal, living & family expenses. So if you sell inventory (that goes to others) of workout drinks or makeup, that’s a business expense. Or if you buy a sample kit that allows you to give potential clients free, small samples (or perform a free makeover), that’s a business expense. But actual product you use on yourself? That isn’t a deduction.
Now Over To You…
Do you have any questions or thoughts about these direct seller tax deductions? Share your thoughts and questions in the comments below!