One of the questions that Network Marketing / Multi Level Marketing owners ask is "What do you have to do to qualify for the home office deduction?" There are strict requirements you must meet in order to qualify, and it pays to "know the (IRS) code" to maximize the deduction and minimize the risk of an IRS audit.

There are three hurdles anyone must meet, regardless of industry or business category:

1. You must be "in business".

2. You must use your home office exclusively for business, and

3. You must use your home office for business on a regular basis.

Any business must meet all three requirements. But once you get past those three general requirements, you must clear one other of several possible hurdles… one of which is pretty easy for network marketers to meet. That other requirement is this: you must regularly and exclusively use your home for administrative or management activities, having no other fixed location where you perform them.

Clearly, there are administrative activities to take care of as a network marketer. Any MLM business owner has books to keep, customer and representative records to maintain, supplies and materials to order, and other similar administrative tasks.

Bottom line, even if you're home office is not where you generate most of your business income…and even if you're home office is not the primary place where you meet customers, you can still easily qualify to take the home office deduction. You do so as long as you perform administrative activities from a workspace at home that is used exclusively and regularly for that purpose.

The key is to use and maintain an area of your home or apartment that you use exclusively for business administrative or management activities. You don’t need an entire room. Part of a room is fine, as long as it doesn’t include desk space that you use for both personal and business work, doesn’t include a filing cabinet with both personal in business files, doesn’t include a bookshelf with both personal and business books, and so on.

Some home business owners are hesitant to take the deduction, for fear it will increase the likelihood of an audit. The fact of the matter is that overall the risk of an audit is very low anyway, regardless of whether you use the deduction. If you're entitled to take the deduction, and understand and comply with IRS rules—and keep good records to prove it—then by all means use the tax code to your advantage.

Bottom line, the home office deduction can be one of the biggest the deductions available to network marketing professionals.

Jim Flauaus, President / CEO of Anchor Accounting & Tax, is a Network Marketing / MLM tax specialist. Through today’s technology, he is able to prepare tax returns and provide MLM tax help for Network Marketers located across the country—even around the globe. Visit his website http://www.anchoraccountingandtax.com to learn more about this topic, and to register for the free special report, "3 Key Ways to Save Thousands of Dollars on Your Tax Return This Year".