Let me guess—you're hustling, building your network marketing empire, and juggling bills like a pro. But when it comes to taxes, you’ve been told that if a bill isn’t in your name, you can’t deduct it, right? Well, here’s a reality check: the IRS doesn’t care whose name is on the bill! All they care about is if you paid it and how much of it went toward your business.
So if you’ve got a phone bill in your spouse’s name or are still riding that family plan, don’t sweat it. You can STILL claim those business deductions if you know the rules. Let’s break it down and get you saving more money!
Listen up, network marketers! Whether it’s your utility bills, internet, or even your phone, the IRS doesn’t give a damn whose name is on the bill. What matters is that you’re using part of that expense for your business and you’ve got proof to back it up.
Here’s the magic formula:
If the bill is in someone else’s name (your spouse, your mom, your dog—okay, maybe not your dog), and you’re using 50% of that internet or phone plan for your biz, you can deduct 50% of the cost. The IRS just wants to see how you got that number, and we’ll show you how to keep your receipts airtight.
Don’t let shared bills or expenses not in your name keep you from maximizing your deductions!
Think splitting bills is complicated? Nah. It’s actually a win for you! If you’re working your network marketing magic from home, chances are your expenses are mixed—some personal, some business. That’s why the IRS lets you split the bill and deduct the part you actually use for work.
Here’s how to do it like a boss:
You’re on a family phone plan with a bill that’s $200 a month, and it’s in your spouse’s name. No worries! You use your phone for team calls, social media management, and all the stuff that keeps your network marketing biz growing.
Here’s the breakdown: 50% of your phone use is for business. You can deduct $100 per month as a business expense. That’s $1,200 a year back in your pocket! Not bad, right?
Just remember to keep logs of your business calls and texts, and make sure you’ve got payment proof in case Uncle Sam comes knocking.
Let’s keep this simple:
Look, I get it—keeping records sounds like a drag. But trust me, solid records mean bigger deductions. And bigger deductions mean more money for you. So let’s keep it real with some simple steps:
Don’t let shared bills or expenses not in your name keep you from maximizing your deductions!
If you’re splitting bills for business and personal use, it’s easy to make mistakes that could cost you serious cash or raise IRS red flags. Here’s what to watch out for:
You didn’t start your network marketing business to waste money. So let’s make sure you’re saving as much as possible by following these tips:
What does the IRS mean by “ordinary and necessary” expenses?
The IRS considers an expense “ordinary” if it’s common and accepted in your line of work, like marketing materials or travel to business events. “Necessary” means the expense is helpful and appropriate for your business. It’s not about whether the expense is mandatory, but whether it benefits and supports your business activities. If an expense is ordinary and necessary, you can claim it as a deduction, even if the bill isn’t in your name.
Can I really deduct bills that aren’t in my name?
Yes! The IRS doesn’t require bills to be in your name or your business’s name to qualify as a deduction. As long as you can prove that the expense is used for business purposes, it doesn’t matter whose name is on the bill. This is common with family phone plans, internet bills, or shared utilities. Just track and document your business use accurately!
How do I split bills between personal and business use?
The key to splitting bills is to calculate what percentage of each expense is used for business purposes. For example, if 50% of your phone usage is for business, you can deduct 50% of your portion of the phone bill. Apply this principle to shared expenses like phone, internet, or even home office utilities, and document your usage to stay compliant.
What records do I need to keep to prove my deductions?
To substantiate your deductions, keep detailed records of your expenses and their business usage. This includes:
Receipts for all shared bills
Logs or notes showing the percentage used for business
Proof of payment (like bank statements)
This documentation is crucial if the IRS ever questions your deductions.
What types of expenses can I deduct if they’re shared or not in my name?
Common shared expenses you can deduct include:
Phone bills (even if they’re on a family plan)
Internet bills (even if the bill isn’t in your name)
Home office utilities like electricity or water
Vehicle expenses if you’re using your car for both business and personal purposes
The key is to calculate the percentage of these expenses used for business and keep records to back up your claims.
Does this apply to the home office deduction too?
Absolutely! If you’re using part of your home as a dedicated office space, you can deduct a percentage of your household expenses like utilities, rent, or mortgage interest based on the square footage of your office. Just make sure the space is used exclusively for business.
How do I know what percentage to deduct for shared expenses?
Determine the percentage by tracking your business use. For example, if you’re using your phone 50% of the time for business calls and follow-ups, that’s your business-use percentage. Apply this same logic to other shared expenses like internet or vehicle costs. It’s all about being honest and accurate with your calculations.
Don’t let shared bills or expenses not in your name keep you from maximizing your deductions!
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