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There are a few of dangerous tax myths for the Essential Oil Business.  If you follow the myths and are audited, you will find yourself in trouble.

Myth #1 – Since you are required a minimum monthly purchase in order to earn a commission, you can deduct the full purchase.  This myth is ONLY true if you do not use any of the product personally.  Even then, if audited, the auditor will find it tough to believe.  You cannot claim any personal usage as a deduction.  You can deduct the portion resold, given away as samples or promotions or the portion used in demonstrations and home parties.

Myth#2 – Since we should “Live the Product”, our personal usage is deductible.  After all, how can we sell a product we don’t use or believe in.  This will also get you in trouble.  It is still personal usage and not deductible.

Myth#3 – In order to understand how to use the product, I need to experiment.  As such, I can claim this as “research and development”.  Again this is false.  First off, it is personal usage.  Secondly the company you get the oils done has already done all the research and development, all you need to do is read about it.

Avoid these myths and reduce your chance of an audit!

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