Vet. Indy agents, I need input

lookin4abetterwayinpa · 05-31-2008, 11:23 PM

I don't want to get to ahead of myself, but thought maybe some of you could give me some input.

On average, how much of my business expenses(working from home), will I be able to write off. I know that I will have to talk to my accountant, I am just looking for round numbers here. I need to gameplan some.

For example 20% of my phone bill, 11% of my in home office space, web-hosting, site fees, leads etc. Thank you all for any advice.

somarco · 06-01-2008, 06:26 AM

Depends on the way you have it set up.

I have a separate line for business only. I also pay my wife rent for the office space (pro-rated for my space vs total sq footage). This allows me to write off a similar portion of utilities, taxes, etc.

The only time any of these things will come up are in an audit, and most of the time the IRS does not send someone to your home to measure sq footage, review bills, etc. They typically will leave you alone unless you have somethings really extraordinary.

If they do audit, they will usually ask for copies of receipts, bills, mileage log, etc.

arnguy · 06-01-2008, 09:27 PM

As`a former IRS agent I can tell you that Bob's answer posted above is directly on thed point. The IRS does not deal with round numbers. You will have to justify as well as prove your deductions if audited. IRS Publication 17 has some good general information and you can go to the Internal Revenue Service website (irs.gov)to secure in-depth information from the IRS publication that deals with an office-in-home.

lookin4abetterwayinpa · 06-01-2008, 10:45 PM

Ty both. I was not looking for round numbers for tax time, just what I should expect. Basically can I write off leads,(if I choose to go that route) the cost of a dialer, gas,web hosting, telephone, ink, files, etc., etc.

Or is it all on me as a business owner? Not trying to cheat the gov. in any way, but I will take a break when it is justifiable.

TimLett · 06-01-2008, 11:13 PM

Originally Posted by lookin4abetterwayinpa

ty both. I was not looking for round numbers for tax time, just what I should expect. Basically can I write off leads,(if I choose to go that route) the cost of a dialer, gas,web hosting, telephone, ink, files, etc., etc.

Or is it all on me as a business owner? Not trying to cheat the gov. in any way, but I will take a break when it is justifiable.

No, it is not all-on-you. As for cheating the government, I don't recommend it. They hate competition.

But yes...you can write off leads, dialer expenses, mileage, web-hosting and associated costs, phone usage (landline and cellular), ink and other office related expenses, and travel costs that meet the standards. This is one beauty of being in business for yourself. If you do it right, almost anything you do can be a write-off. Just make sure you document it down to the last sesame-seed.

senior-advisor-indiana · 06-02-2008, 11:20 AM

I won a free Whopper at Burger King last week. Will I have to pay taxes on that? I was working moe than 30 miles from home so it should be deductible right?

The Rabbi · 06-02-2008, 11:27 AM

Originally Posted by senior-advisor-indiana

I won a free Whopper at Burger King last week. Will I have to pay taxes on that? I was working moe than 30 miles from home so it should be deductible right?

You have to first declare it as income and then you can deduct it as an expense if you are entitled.

Research independent contractor expenses. Everything you spend to earn money is deductible. If you have a 5 room house and one room is your office, take 20% of the house overhead.

tryan326 · 06-02-2008, 12:39 PM

Originally Posted by lookin4abetterwayinpa

can I write off leads,(if I choose to go that route) the cost of a dialer, gas,web hosting, telephone, ink, files, etc., etc.

Or is it all on me as a business owner? Not trying to cheat the gov. in any way, but I will take a break when it is justifiable.

Yes you can write off most if not all of these expenses. How much you can write off depends on your business structure i.e. sole Prop, llc and etc. As far as your home that is usually determined by what percentage of the home is used for business. Do some research on irs.gov or meet with a CPA they usually wont charge for a consult.

arnguy · 06-02-2008, 01:28 PM

Basically the Internal revenue Code allows for ordinary business expenses to be deducted from gross income. Now in the case of Senior-Advisor he better report that Whopper winning because the IRS has been alerted.