No matter where you live, you have to pay taxes. You’ll pay federal tax and maybe state tax and neither one is an option if it’s the law. If you don’t pay your Network Marketing sales tax, you’ll get to know the IRS in an up close and personal way.

You don’t want that. The IRS have long memories and if they’ve had to check you out for not knowing how to properly file taxes, they’ll keep an eye for you for a while and who wants that headache?

Because a Network Marketing company and the income it generates is a legitimate way to make money, the companies fall under the jurisdiction of both local and federal tax laws. Whether you sell the product locally where you live or you sell it online to consumers who live in other states, you have to be aware of how the sales tax laws affect you.

When you join an Network Marketing company, if they can’t give you an answer about how they handle taxes or they blow off paying them altogether, this should raise huge red flags in your mind.

A company that’s not honest in all of their business practices – including to the government, might not be honest with you either. A trustworthy Network Marketing company wants to be above reproach in all areas of doing business.

If you’re currently in a Network Marketing company and you aren’t sure what your tax liabilities are, then find out. Ask your company how they’re handling the taxes. If you don’t get an answer, check with the local IRS office. The IRS penalty for not paying or underpaying taxes could cost you significantly more than you want to pay.

A trustworthy company will teach you right from the beginning of your joining the company what you need to know about Network Marketing sales tax. You should learn whether they’ll handle them or if you’re going to need to do it yourself.

Some companies will charge tax on the products while others will have you sign a contract as an independent representative meaning the entire responsibility of taking care of taxes falls on your shoulders alone.

You might have heard all kinds of well meaning advice that you don’t have to report income if it’s below a certain level or if it’s considered a hobby but this is wrong advice. If you’re unsure what the tax laws are and how they affect you in the state where you live, take the time to find out. A little inconvenience now can save you major headaches later.