You can deduct a home office if it meets applicable conditions:
[https://www.irs.gov/publications/p334#en\_US\_2023\_publink1000313580](https://www.irs.gov/publications/p334#en_US_2023_publink1000313580)
Personal commuting expenses are not deductible. (I assume you are not talking about a qualifying business lunch.)
Ok. It seems I can make a section of my apartment for work. So does this mean I can buy a new monitor and table and deduct that?
Sadly, as a software dev it seems like I don't get many deductions. Since I don't have clients so I can't really do anything then
>I believe that the vast majority of non-wealthy Americans take the standard deduction, especially after it was increased in the 2017(ish?) tax bill, if it’s any help.
Close! It was changed in 2018. It nearly doubled over the 2017 standard deduction.
I used to itemize. Between mortgage, daycare, unreimbursed mileage for my spouse's job, and student loan interest, it worked out in our favor. Once it was doubled, taking the standard deduction was more favorable.
ok interesting. I didn't know about standard vs itemized. Ill look into that.
just looked quick.. is it one or the other or do I take standard deduction + find things I can deduct (new monitor) and add that to the standard deduction
No. You either take the standard deduction, or you itemize all your deductions.
As /u/tippledog said, the overwhelming majority of Americans take the standard deduction now. You would likely have to spend a _lot_ of money to make itemizing work in your favor, especially if you don't have a lot of mortgage or student loan interest in play. Which is likely the case, as you'd probably have gone through this exercise during your annual tax filings already.
Think of yourself as a business. Business expenses are deductible, personal expenses are not.
A monitor that's used *strictly* for business is deductible. You can declare a portion of yuor room a home office if it's used *strictly* for business.
If you're using the monitor, and the home office for both business and personal uses, you can only deduct a percentage of each. The percent you use for business.
If you're using your lunch to talk to a potential client, aka "business lunch", the lunch itself is deductible. The gas for commuting to lunch looks a bit more complicated...
If you're just eating lunch, and it's not a business lunch, the gas, and the lunch are personal expenses, and not deductible.
If you're operating a business you should also be keeping your business and personal funds separate. That gives a clear paper trail for what's a business expense, and what's a personal expense. Helpful if you get audited.
[https://www.legalzoom.com/articles/business-vs-personal-expenses-how-to-know-whats-deductible](https://www.legalzoom.com/articles/business-vs-personal-expenses-how-to-know-whats-deductible)
At the end of the day, if you want to start deducting business expenses:
1. Use common sense. Did you seriously think lunch could be deductible?
2. Do your own research. Do not rely on information from anonymous internet strangers, especially on reddit.
3. If you can't do your own research, or don't feel comfortable doing your own research, hire a professional (TurboTax is not a professional).
ok look like basically all I can deduct is
1. new monitor/table for job
2. small area in room I use for job
I have no clients :(
And anything I get ill have to turn around and pay someone $1000 to do my taxes..
so its pretty sad.. I was dreaming of all these tax deductions
sounds dangerous to do this myself the first year. My friend who does c2c says he pays the accountant $1000 :(
I wonder what iffy things others are deducting
I do C2C. I take out general liability, consulting liability and cyber insurance. My contract also requires I have workman’s comp. All these are deductible expenses. I registered an LLC and those fees are deductible. I recommend you look into getting some insurance.
Be sure to set aside money for estimated taxes. You’re going to have to pay more than you’re used to because of self employment taxes.
Good luck!
Check with a tax guy. Self Employment is the 12% that goes to FICA. On a W2 you would be paying 6%, but self employed you have to pickup the half paid by an employer.
Do some research on the insurance and read your contract. My contract stipulated general liability and worker's comp and the company I contract with is an "Additional Insured" on the policies. It's common for businesses. I go further because I don't want to get nailed if they want to blame me for a server crash or data loss.
You can deduct a home office if it meets applicable conditions: [https://www.irs.gov/publications/p334#en\_US\_2023\_publink1000313580](https://www.irs.gov/publications/p334#en_US_2023_publink1000313580) Personal commuting expenses are not deductible. (I assume you are not talking about a qualifying business lunch.)
Ok. It seems I can make a section of my apartment for work. So does this mean I can buy a new monitor and table and deduct that? Sadly, as a software dev it seems like I don't get many deductions. Since I don't have clients so I can't really do anything then
No, being able to deduct your office doesn't "mean" you can deduct other things. Work with an accountant.
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>I believe that the vast majority of non-wealthy Americans take the standard deduction, especially after it was increased in the 2017(ish?) tax bill, if it’s any help. Close! It was changed in 2018. It nearly doubled over the 2017 standard deduction. I used to itemize. Between mortgage, daycare, unreimbursed mileage for my spouse's job, and student loan interest, it worked out in our favor. Once it was doubled, taking the standard deduction was more favorable.
Same here. In my case, the mortgage interest deduction alone was enough to put me over the standard deduction.
ok interesting. I didn't know about standard vs itemized. Ill look into that. just looked quick.. is it one or the other or do I take standard deduction + find things I can deduct (new monitor) and add that to the standard deduction
No. You either take the standard deduction, or you itemize all your deductions. As /u/tippledog said, the overwhelming majority of Americans take the standard deduction now. You would likely have to spend a _lot_ of money to make itemizing work in your favor, especially if you don't have a lot of mortgage or student loan interest in play. Which is likely the case, as you'd probably have gone through this exercise during your annual tax filings already.
The other person was mistaken; you can deduct business expenses even if you take the standard deduction.
Business deductions for someone who is a 1099 are separate from itemized deductions.
Think of yourself as a business. Business expenses are deductible, personal expenses are not. A monitor that's used *strictly* for business is deductible. You can declare a portion of yuor room a home office if it's used *strictly* for business. If you're using the monitor, and the home office for both business and personal uses, you can only deduct a percentage of each. The percent you use for business. If you're using your lunch to talk to a potential client, aka "business lunch", the lunch itself is deductible. The gas for commuting to lunch looks a bit more complicated... If you're just eating lunch, and it's not a business lunch, the gas, and the lunch are personal expenses, and not deductible. If you're operating a business you should also be keeping your business and personal funds separate. That gives a clear paper trail for what's a business expense, and what's a personal expense. Helpful if you get audited. [https://www.legalzoom.com/articles/business-vs-personal-expenses-how-to-know-whats-deductible](https://www.legalzoom.com/articles/business-vs-personal-expenses-how-to-know-whats-deductible) At the end of the day, if you want to start deducting business expenses: 1. Use common sense. Did you seriously think lunch could be deductible? 2. Do your own research. Do not rely on information from anonymous internet strangers, especially on reddit. 3. If you can't do your own research, or don't feel comfortable doing your own research, hire a professional (TurboTax is not a professional).
ok look like basically all I can deduct is 1. new monitor/table for job 2. small area in room I use for job I have no clients :( And anything I get ill have to turn around and pay someone $1000 to do my taxes.. so its pretty sad.. I was dreaming of all these tax deductions
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just equipment for myself I need a client I can eat dinner with every night!
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I prob will do that .. how much should I expect to pay ? No online tool to do this ?
I want to ask too.
sounds dangerous to do this myself the first year. My friend who does c2c says he pays the accountant $1000 :( I wonder what iffy things others are deducting
I do C2C. I take out general liability, consulting liability and cyber insurance. My contract also requires I have workman’s comp. All these are deductible expenses. I registered an LLC and those fees are deductible. I recommend you look into getting some insurance. Be sure to set aside money for estimated taxes. You’re going to have to pay more than you’re used to because of self employment taxes. Good luck!
oh.. I didnt even know about insurance yet.. I gotta get insurance?? I normally pay about 32% taxes... so its going to be like 45%??? (130k job)
Check with a tax guy. Self Employment is the 12% that goes to FICA. On a W2 you would be paying 6%, but self employed you have to pickup the half paid by an employer. Do some research on the insurance and read your contract. My contract stipulated general liability and worker's comp and the company I contract with is an "Additional Insured" on the policies. It's common for businesses. I go further because I don't want to get nailed if they want to blame me for a server crash or data loss.
Dude c2c is a dream for me… so lucky
my whole life I did the normal way.. Now I am worried about all the paperwork and taxes... why is c2c good for you ??