As a network marketer, you’re wearing a lot of hats—leader, salesperson, motivator, and more. With so many moving parts, you’ve got plenty of expenses, from travel costs to training materials. But are you confident you’re deducting them correctly? The IRS says that to qualify for a deduction, an expense must be "ordinary and necessary" for your business. Let’s unpack what that really means so you can keep more of your hard-earned money.

Think about it: every dollar you spend on your business is an opportunity to lower your tax bill. If you’re spending money on samples, travel, training, or even setting up your home office, those costs could add up to big tax savings—if you know what qualifies.

It’s not just about jotting down expenses and hoping for the best. You need to understand what counts as a deduction, keep solid records, and play by the IRS’s rules. Let’s break it down.

The IRS defines an "ordinary" expense as something that’s common and accepted in your industry. For network marketers, this might mean things like buying promotional materials, attending conferences, or investing in training courses. These are expected expenses for someone in your line of work.

A "necessary" expense, on the other hand, doesn’t have to be absolutely essential, but it does need to be helpful and appropriate for your business. This could include setting up a dedicated home office if you run your business from home, or using financial management software like Keep More Worry Less to keep your expenses in check.

Here’s the key takeaway: for an expense to be deductible, it has to meet both the ordinary and necessary standards. Not every ordinary expense is necessary, and not every necessary expense is ordinary—but the goal is to check both boxes.

It’s easy to get tripped up on what counts as a business deduction. A lot of network marketers think they can write off every meal where business gets mentioned or every mile driven to meet a client. But the IRS needs more than just a casual conversation to qualify a deduction.

For example, you can’t write off a family vacation just because you happened to chat about business. And that workspace at the kitchen table? Unless it’s used exclusively for business, it doesn’t count as a home office deduction.

Misunderstandings like these can lead to audits or disallowed deductions. And let’s be real—you don’t need that kind of stress in your life. So, keep it clear: only deduct what truly fits the IRS definition of ordinary and necessary.

So what can you actually deduct? Let’s get into the nitty-gritty of what expenses are both ordinary and necessary for network marketers like you:

Home Office: If you use part of your home solely for business, you can deduct a portion of your rent, utilities, and internet. But it has to be a dedicated workspace.

Supplies: Office supplies, computers, and anything you use exclusively for business are fair game for deductions.

Travel: Business-related travel costs are deductible. Just make sure the primary purpose of the trip is business, not pleasure.

Marketing Costs: Promoting your network and growing your team? The costs of ads, flyers, and online marketing efforts are deductible.

Training and Development: If you attend seminars or workshops to sharpen your skills, these expenses are deductible too.

Just as there are expenses you should claim, there are some you should avoid to stay on the IRS’s good side:

Personal Expenses Disguised as Business Costs: We’ve all heard stories of people trying to pass off a vacation as a business trip, but it won’t hold up under scrutiny. Keep business and personal costs separate.

Lavish Spending: Even if you’re in a high-end niche, don’t assume that extravagant purchases will automatically be deductible. The IRS expects expenses to be reasonable in proportion to your business income.

Entertainment Costs: New tax rules have made entertainment expenses a no-go for deductions. A meal with a prospect? Sure. Tickets to a concert afterward? Not so much.

Multi-Purpose Home Offices: If your home office doubles as a dining room, it won’t count. Keep your home office strictly for business to claim this deduction.

Now that you know what you can and can’t deduct, let’s talk about documenting it all. Good record-keeping isn’t just a nice-to-have; it’s a must. The IRS can ask for proof of your expenses at any time, so having solid records is crucial.

Use a digital tool like Keep More Worry Less to track your expenses and store your receipts. You’ll want to keep details like the date, amount, and purpose of each expense. Trust me, the more organized you are, the easier tax season will be.

Understanding what’s ordinary and necessary isn’t just about avoiding trouble with the IRS. It’s about maximizing your earnings and minimizing stress. Stay organized, stay informed, and use tools like Keep More Worry Less to make it easy.

And remember, if you’re ever unsure about what qualifies, consult with a tax professional who understands the unique needs of network marketers. Taking these steps will keep you compliant and ensure you keep more of your hard-earned cash.