Sampling is an important part of your business.
The IRS has very specific rules for documenting products used for sampling.
To start, you, as a business owner, must have an invoice or receipt as proof of payment. Your Amway invoice meets the requirements as proof of payment. All products used for sampling purposes should be highlighted on your invoices and noted as samples. Remember to carefully note who you gave the sample to and the business purpose. For example you might give a sample to prospects to encourage them to look at the Amway business or potential customers to encourage them to buy products.
It's important to remember to go back to the invoice and note any products that are later pulled from your inventory that will be used for sampling.
This is an important task should you ever be faced with an audit.
Note: Tax Tips is one of many resources provided by the IBOAI designed to assist IBOs in the operation of an independent business. These tips are for informational purposes only, as always, it is important to seek the advice of your own tax professional for your specific circumstances.