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Tax Tips for Salespeople

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    • Commissioned salespeople frequently come under special scrutiny for IRS auditors. This is because of the wide variety of tax deductions available to sales professionals. Many sales professionals are independent contractors rather than statutory employees, and therefore effectively run their own businesses with all the attendant expenses, which are frequently unreimbursed by the companies they represent.

    Keep Meticulous Records

    • Create a folder or box to keep receipts for legitimate business expenses. Use a spreadsheet to track them, or hire an administrative assistant to do it for you. You want the IRS to tax you on your profits, not your growth.

    Deduct mileage

    • You cannot deduct mileage from your home to your primary place of business, but if you keep a home office, you can deduct mileage to all your appointments. As of 2010, the IRS allows you to deduct 50 cents per mile to account for fuel costs and vehicle wear and tear. Keep a notebook in your car and record your mileage for each trip, or do the same thing using a Blackberry, iPhone or other personal digital device.

    Home Office Deduction

    • If you have an area in your home dedicated for work, you can deduct a proportional amount of your rent or home mortgage payment based on the square footage of your home office. It doesn't have to be a dedicated room, but it must be a dedicated work area. That is, you cannot deduct a home office that you use partly for personal and recreational use as well.

    Meals and Entertainment

    • If you treat a client to lunch or dinner, you can deduct half of that expense as a necessary and proper business expense. It is important to keep receipts, as IRS auditors frequently challenge taxpayers on deducting out-of-the-ordinary expenses. The expense must be reasonable and not lavish or extravagant in order for you to take a deduction.

    Education

    • You may generally deduct the cost of any classes or seminars you take that are required for keeping your job, or that you need to enhance your productivity or maintain your license. You may also deduct professional journal subscriptions as well. You cannot deduct the costs of classes that qualify you for a new career, however.

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