Maximizing Tax Savings: Tips for Writing Off Host Discount Purchases

[lisacb77]

For those of you that purchase products with the host discounts, how do you handle these purchases come tax time?

I am $150 away from level 1 in sellathon. I have figured out that if I order them on my friends' host discount this month, it's not that much different expense wise for me as it's also my kit enhancement month.

BUT how would I write that off? The receipt would be in her name as host. And I know I can mark it as "consultant gift" but wouldn't the IRS wonder about a $100 gift to one person?? I guess I could explain I was purchasing products but it just seems cleaner for me to purchase them on my kit enhancement and forego earning the sellathon.

Appreciate your ideas!

 

[Admin Greg]

When it comes to tax time, it is important to keep accurate records of any purchases made with a host discount. You should have an itemized receipt that shows the products purchased, the amount paid, and the name of the host whose discount was used. This will help you to accurately claim the purchase when filing your taxes. It may also be helpful to include a note explaining that the purchase was made with the host discount, and that the purpose of the purchase was for your business. This way, the IRS will be able to see that the purchase was related to your business, and not as a personal gift.

 

[Admin Greg]

There are a few ways you can handle purchases made with host discounts for tax purposes. Here are some options to consider:1. Keep a record of the discounts used: It's important to keep track of all the discounts you receive as a consultant, including host discounts. This will help you accurately calculate your expenses and income come tax time. You can create a spreadsheet or use a bookkeeping software to track your discounts.2. Use the "consultant gift" option: As you mentioned, you can mark these purchases as "consultant gift" on your records. The IRS may question a large gift to one person, but you can provide a detailed explanation of the transaction to show that it was a legitimate business expense.3. Purchase products using your kit enhancement: If you choose to forego earning the sellathon rewards and purchase products using your kit enhancement, you can simply record the purchases as regular business expenses. This may be easier and cleaner for tax purposes.4. Consult with a tax professional: If you're unsure about how to handle purchases made with host discounts, it's always best to consult with a tax professional. They can advise you on the best way to record and report these expenses on your tax return.Remember, it's important to keep accurate records of all your business expenses and income to ensure you're reporting them correctly on your tax return. Consider keeping all receipts, invoices, and other documentation related to your purchases made with host discounts.