In today’s video we discuss three simple steps you can take to save money on your taxes. These small steps can also make a BIG difference for your network marketing business! Be sure to join The Cunningham Collective on YouTube and Facebook for more information today.
01:41 Business Tax Returns
02:41 Three Simple Steps
03:39 Save 25%
04:43 Where Does the Money Go?
05:49 Get a Mentor
07:50 Connect with Us!
Hey, everyone. In this video, we’re going to be talking about taxes. Taxes and network marketing.
All right, guys, let’s dive into this. This is, believe it or not, a topic I do enjoy talking about. I’m very passionate about not overpaying for taxes. I’m not trying to avoid paying taxes, but I will tell you that if you’re not careful, you can end up wasting a lot of money. Money that you could be using to put your business into hyper-growth. I’ve owned businesses with my wife for many years. In fact, over 30 years of owning home-based businesses with employees, without employees, LLCs, S-corps, C corps, we’ve done it all. And they all require a tax return. And tax seasons right around the corner, right? We’re just a few weeks away. And just a note, I’ve heard that they may be pushing it out a little bit. So you may want to check on that because of all of the commotion of the year of 2020. But first of all, many people in network marketing are not used to filing or having to deal with a business type tax return.
Business Tax Returns
Maybe they’ve been employees their entire life, and they really don’t even know what the steps are. And so it’s important that you get a plan. I applaud you for owning the business because now that you own a network marketing business, a home-based business, did you know that you can probably save on this year’s taxes between three and $8,000? I mean, that’s incredible. Think about what you could do with that money versus just sending it off to pay taxes that you probably didn’t have to pay. And little side note, taxes are going to be going up. So it’s more important now than ever that you get a plan. And I’m just going to let you guys know, I’m not a CPA, I’m not a tax expert, but I do have, as I said, over three decades of experience when it comes to this subject and I’m very passionate about it.
Three Simple Steps
I’ll tell you a quick story, before we jump into the meat of three simple steps I’m going to share with you. I know people that have had great success in network marketing. I mean, great success and are no longer doing network marketing. And one of the major, in fact, when I got the phone call, it was about taxes and back due taxes and kind of like panic mode because there wasn’t money set aside, or there wasn’t a plan put in place to pay these taxes. Many people are used to the taxes, just getting pulled out and then they file returns and maybe they get a little bit of a refund. And that’s not how it works as a business owner. So I’m going to share with you three simple steps, right now that will make sure that you’re not caught off guard and in fact can really take advantage of what is available to you.
So step number one, I want you to save 25% of all earnings from your network marketing opportunity. Now, why 25%? Well, I think any more than that might be a little too much, especially if you’re new, because we’re talking about tax brackets, right? Any less than that, and you may find yourself trying to scramble. I would rather err on the side of conservative, when it comes to you having enough money set aside. 25% is a really, really good number. And depending on the amount of income you earn, of course will depend on how much of a percentage of your earnings you’ll have to pay in taxes. But right off the top, when the money comes in, you should set aside 25%, which brings me to my second simple solution for you. Where do you put it? If you’re going to set it aside, where do you put it?
Where Does the Money Go?
Do not put it in the same accounts, checking or savings accounts that you use for all your other expenses, or maybe even your other savings. It’s really inexpensive these days to own a bank account and to have several bank accounts. And I’m going to suggest to you, you get… create a separate bank account just for your taxes, in the beginning. Now, as you get a little bit more sophisticated with this things will change. You may hire a CPA to come in. You may start doing your taxes on a quarterly or even monthly basis. Things will… as your income increases, your tax strategy, the sophistication needs to increase as well. But go and get yourself a second bank account. And the third tip and the one that I want to stress the most for you is that you get a mentor. I’ve been in network marketing for coming on 12 years and we’ve had a great deal of success.
Get a Mentor
And we mentor our team and really we mentor the profession of network marketing and have, and spoke on many of the big stages. And rarely, if ever do I get questions asked about taxes. I get questions about, do you lead with the product? Do you lead with the business? How do you create leadership? I mean, all these questions about the business or the profession of network marketing, and rarely do I get asked about taxes. And I have a great deal of knowledge and understanding that I am more than willing to share. And so my suggestion to you, and probably the best tip of the three tips is get a mentor in your company or maybe outside of your company that can help you with a strategy for your taxes so that you understand it so that you can maximize it. As I said, I’m not licensed. I’m not a CPA. I’m not a tax expert.
But I will tell you, there are a lot of things going on that your CPA may not know can be deducted. I mean, this year you may have went out and got a Zoom account. That’s a business expense. You may have apps on your cell phone that has a monthly subscription. That’s a business expense. The cell phone itself. I mean, you’re spending probably an hour or hours and hours every day on it. That’s a business expense. Your own home, your office that you work, there’s a percentage of the square footage of your home that is a business expense. I could go on and on and on. I have a list of things that I could share with you, but really what I want you to do is I want you to reach out to someone that can really help guide you and someone that has some answers based on experience, not like, well, this is what I did last year.
Connect with Us!
No, how about this is what I’ve done and what we’ve proven to be able to do. And maybe, just maybe they’ll share with you their tax bracket that they stay in because as you make more money, the tax bracket gets higher. And your good mentors, your good mentors are not in those high brackets, they’re not. They are using tax law in their favor and other things to lower the taxes. So I hope those three things help. Just remember here, our goal at The Cunningham Collective is to help everyday people win big in network marketing. So if you like this information, subscribe, share it out. That would be fantastic as well. Go to The Cunningham Collective there’s videos there, and a blog there that may have content that can really help you today. I hope this helped and you guys have a great day.