Disclaimer: The content of this article is provided for informational purposes only. The author of this article is not a lawyer or an accountant.  For all questions regarding tax matters, you should consult an attorney or an accountant.

C-9   AUTO EXPENSE:  As long as you have a car available for personal use, you can usually deduct your business car.  You may choose actual expenses (save every receipt for gas, oil, repairs, etc.) or standard mileage.  Most experts agree that standard mileage is the best way to go.  IT’S EASY!   Add up all the miles you drove for business from January through December and multiply by the standard mileage rate.  The rate in 2006 is 44.5 cents per mile.  Add all your parking fees and tolls to this. If you had a business appointment and you made an unplanned stop at the grocery store on the way home (and you did NOT drive out of your way) then deduct the round trip!  Every trip you make must FIRST be associated with business.  Record keeping for the standard mileage deduction is easy.  One of the best ways to prove your car actually put on the miles is your oil change receipts.  Get your car's oil changed at the beginning of the year and again at the end of the year.  The odometer readings are documented on your receipt.  Then keep a record of your various appointments in your day planner or calendar. Keep receipts from your various destinations.  (Buy a candy bar at the 7-11 store in Eagle River, Wisconsin and save the receipt to prove you were there.)  No sweat!  Happy driving!

C-11  CONTRACT LABOR:  Hire your kids!  You can deduct wages paid to your children in your business!  If you pay them under $5,150 in 2006, you don't even have to file a return for them!  Of course the wages have to be reasonable for real work.  Nobody’s going to believe you pay your 8-year-old $100 an hour to vacuum your office!  Paying your kids doesn’t really cost you anything if you require them to use that income for piano lessons, sports, lunch money, clothes, fun activities, etc.

C-13  SECTION 179 EXPENSING:  This tax law (also called First Year Expensing) allows you to write off certain business expenses (up to $108,000!) incurred in 2006 without  having to depreciate them over time.  The amount you deduct may not exceed your total income. Consider a $3,000 computer used 75% of the time for business.  You can deduct $2,250 (75% of $3,000) on the tax return for the year you bought the computer!  (If you don't use 179 expensing on your first return for the year, you cannot change your mind and add it later on an amended return.)  You’ll need form 4562. Or check out publication 946.

C-18  OFFICE EXPENSE:  Think of your office as a big demo room!  You can use section 179 to deduct many expenses, so long as your business use of those items exceeds 50%.  Think about the things you can have!  Chairs, sofas, file cabinets, lamps, book-shelves, artwork, computer equipment of all kinds, carpets, phones, cell phones, T.V., DVD, hot tub – well maybe not a hot tub – but you get the picture!  And while we’re on the subject, let’s not forget to deduct your HOME OFFICE EXPENSES.  New rules (!!!!!):  Tax payers are not required to use the space exclusively for the storage of inventory or product samples in order to be eligible for the deduction.  The new rule adds 'product samples' to clarify the current rule, so taxpayers need not attempt to distinguish between inventory and product samples.  Example: Joe uses space in the study of his home to store product 'samples.'  Joe may deduct the study even though he uses it for other purposes."  If you use 20% of your home for business purposes, you may deduct 20% of your utility bills, house insurance, repairs and maintenance costs, etc. You’ll need form 8829.  Hint: Don’t claim a home office deduction in the year you sell your home.

C-20 AUTO LEASE:  If you lease your car you cannot take the standard mileage.  Just figure out what percentage of the total year-end miles are for business use.  Example:  You drove 20,000 miles on your leased car in 2006.  80% was for business.  Your payments are $400/month or $4800/year.  You may deduct $3840.  ($4800 x .80)

C-21  REPAIRS AND MAINTENANCE:  Did your cell phone need to be repaired?  Did  your office chair break?  Did you have your carpet cleaned?  (Be sure to use your Melaleuca products to do all your office cleaning!)  You can’t deduct the cost of your own labor - but you can pay your kids!

C-22  SUPPLIES:  If you rotate your products through your Career or Value Pack(s) - (don’t forget Nicole Miller!) - AND they are open and intended for use as DEMOS,  they are deductible.   It is expected that you will have to refurbish your demo kit on a consistent basis.  What you do with discarded demo products is irrelevant.  

C-23  TAXES:  You may deduct the tax on the purchase of all your business supplies and demos, and any tax associated with a business asset.

C-24a,b,c  TRAVEL,  LODGING,  MEALS, ENTERTAINMENT:  You will never take a vacation again! Every trip is a business trip!  (A trip is primarily business if you can establish that vacationing was not a major consideration.)  Of course, while you’re in Florida to set up an account for your in-laws,  you might have to bribe them into listening by taking them with you to Disney World(!).  Conventions make a terrific business trip - not vacation! Be sure to check your allowable per diem in publication 463 for additional deductions.  You now can choose High/Low as a standeard deduction for lodging and meals.  The high is $226 per day (this includes Chicago!), and the low is $148 per day – ($103 for lodging and $45 for meals and incidentals)  it depends on the city whether you use the high or low.  Take an extra $3 per day for incidentals.  You may deduct business cruises up to $2,000!  Don’t forget to take your Sun Shades!  Have a business meeting over lunch, take the deduction!  As long as you discuss business before, during, OR after your fun, you may deduct 50% of your good time!  Many forms of business entertainment are deductible - use your imagination!  (Note: Club memberships are not deductible.)

C-25 UTILITIES:  This refers mostly to business phone expenses.  You cannot deduct the very basic service charge of your monthly home phone bill- but everything else is fair game.  Extra services such as voice-mail, caller ID, 3-way calling, Call Waiting, etc. Also:  fax machines, cell phones, pagers, answering machines, Direct Link, In-Touch,  conference calls, internet and more.  You may also deduct up to $30 per week for pay phones - no receipts required!  That’s up to $1,560 per year!  Talk is really cheap!

C-27  OTHER EXPENSES:   All shipping and handling, postage, Convention tickets, awards and recognition, cost of holding a meeting, etc. – deduct away!

HEALTH INSURANCE:  If you had net profits for 2006, you may deduct the cost of  your health insurance for the entire family (not provided by an employer).  Enter your health insurance premiums on line 29 of form 1040.