Often people are exposed to or invited to participate in a network marketing business but do not understand the power that the opportunity presents and end up turning it down. You’ll hear them say “not another one of those things!” Do you realize what’s at stake and what you lose by NOT being a network marketer (a 1099 employee)? Most people think network marketing is all about creating a new income stream, but it’s also about getting back income that’s already yours. Doesn’t that make sense? Why work harder, giving up more precious time, just to pay more out? We have countless busy professionals who start their own network marketing business not to go all out recruiting, but to take advantage of protecting their income from their profession with tax breaks afforded to small business owners. Because it is not a traditional job, people don’t realize the instant benefits of starting in network marketing. Direct sales companies usually pay their independent representatives as contractors and issue a 1099-misc for each tax year. Working in this manner and building a business has amazing benefits that you may not realize.
Benefits of being your own boss with a 1099
You can run your own mini-company without a huge capital investment and with far less risk than going out on your own. You don’t have to create or price a product or service. The company has the brand identity; all you have to do is hop on and run with it. This part is all-profit. Good companies will even have training and systems in place to take the mystery and anxiety out of working for yourself. If nothing happens, with this extra benefit of being your own boss to make more money, you’ve still lost nothing and have so much more to gain in taxes with your 1099.
You control your own hours
10 out of 10 people are looking for extra income. The problem is that they don’t have a ton of extra time to allocate to working a part-time schedule in addition to their full-time career. Sound familiar? Working for a W-2 is trading time for money. Network marketing is trading results for money. The time doesn’t matter. You get paid according to how productive you are regardless of time. This is a great way to bridge in a little effort to maximize your results. Most people start out at 7-10 hours per week; one to one-and-a-half hours a day, while they are out or on the computer, doing what they are already accustomed to. I remember when I first started in network marketing I earned $1,500 in just seven hours of effort where it took me a whole month at my regular j.o.b. (just over broke) to earn the same.
Tax benefits of a 1099
For many people $500 a month would be a significant change to their income – to pay some extra bills, or save for vacation or emergencies. That’s $6,000 per year. What most don’t realize is that the money is just sitting, waiting for them to take it back. People complain about how much is taken from their paycheck; but, having a 1099 gives you access to a good portion of those funds that you’ve already earned, but have lost in taxes. So, by joining a network marketing company you get to take advantage of tax deductions as a business owner that employees don’t get. Before you’ve made a dime in your part-time venture, you’re already in profit. It amazes me why someone wouldn’t jump at the opportunity to have their own 1099. Last year, my husband and I earned back over $17,000 in taxes from the benefits of owning our own network marketing business. That’s more money than if someone were to get a second full-time job (most second jobs are at or near minimum wage) and we didn’t have to sweat an extra 40 hours a week to do it.
Having a 1099 home business is a powerful tool. You can be your own boss and set your own hours without having a business that owns you like a traditional ‘brick and mortar’ business. You can set it down when you need to and pick it back up. Your time becomes more flexible and rewarding as you’re paid for results instead of trading time. And, finally, each year with minimal effort you can reap the rewards not only through your company’s compensation plan, but what the government allows as tax deductions for owning a business. It’s a win-win-win and you’d be wise to take advantage of this powerful tool that can change your financial outcome. Update: Be sure to go to my training topic, Top 1099 Tax Deductions, for details on some important ways to keep what you earn.
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1 comment
Thank you Jennifer for 1099 tax information. This is my problem: I created forms to keep information for taxes, but there are too many forms. I bought Quicken, but don’t know how to use it, I also have Quick Books. In addition. I have a receipt reader too. Also, it does not seem that I can deduct personal grooming. My question? Is there a simple format to record tax information to deduct for Small Business, or can you take a standard business deduction? Thanks!