Thank you so much! I have been selling online for years and never used a single write off. I’m only 26 and I’m the first person in my family to work for myself so I am still learning. I cannot believe I didn’t know any of these! Thank you so so much you just saved me so much money. 😊
so in your example, you said 16% of the office space can be calm. How do you get a dollar amount of the 16%? Do you add all your utilities up and claim 16% of that? sorry I am a little confused. lol
Thank you for all these information especially having your work desk in your bedroom. I thought the work area has to be a separate room. I'm so glad this doesn't have to be the case. You got me hooked on your channel Ma'am. I really enjoy tunning in.
Im a full time employee receiving a w2, opened my own online store, and stream games on Twitch under my LLC. I use my room to broadcast! Am i able to measure my work room, closet for storage, and hallway to the restroom? I am learning how to do write offs. Love the vids!! Thank you
Thank you for your videos I have been searching about a month to have all this explained in a way I understood it. I have a Major question, in a comments section (someone else’s video) they posted that people need to be aware that if they claim a home office when you sell your home they will take a portion of your profit from selling the home because it means that your business owns a %. So people need to be weary if they are still paying a mortgage. So if you decide not to claim a home office because of this (planning to sell your home soon) can you still deduct other expenses such as wifi? Also do you recommend an excel sheet for trying income and expenses at least for beginners?
Great questions! This would actually only affect offices outside the home - something like a separate work shed or unattached garage. Offices inside the home are covered by the primary residence tax exclusion - meaning that, when the home sells, up to $250,000 of gain is excluded for single filers (or $500,000 for a married couple filing jointly.) There's also the issue of depreciation recapture, which the IRS uses to stop us from "double-dipping" with tax breaks. That means any depreciation you claimed over the years (or could have claimed) will be taxed at your regular income tax rate (maxing out at 25%). So if you've taken $20,000 in depreciation, you could owe up to 25% of that, which is $5,000. (That's probably still less than what you've saved on your taxes by claiming that depreciation!) As for your final question, we've got a couple spreadsheets we recommend! Here's one just for home office expenses: www.keepertax.com/posts/home-office-deduction-excel-spreadsheet And here's one for business expenses in general: www.keepertax.com/posts/1099-excel-template
Hello and thank you for these very informative videos, i wanted to ask wether or not it is allowed to utilize home deductions in a home that is in my parents name, i do operate out of my home office more than once a week and have an entire room as my work space/home office. However i am wondering if the home needs to be in my name to claim it as a write off for my small business which is an LLC with myself as the one and only sole proprietor. Please let me know any advice you may have, Thank you!
If I use my office for my 9 to 5, but also use it for my business 24 hours a week, can I write this off? It seems like it'd be a shame to not be able write off my home office taxes because I use the same desk for my 9 to 5.
Sorry if I’m confused, but in some parts of this video you say “partial write off.” Where others you say, “write off.” Ie, when you were talking about writing off WiFi. It sounded like you were saying I can write off the whole Wi-Fi bill and not the calculated percentage. How do I know when to write the whole thing off, versus the percentage?
Hey! You can write off the business-use percentage of your internet. For example, pretend you use your internet for client communications 40% of the time, and for Netflix, TikTok, and online shopping the other 60% of the time. You can write off 40%! More here: www.keepertax.com/posts/how-to-deduct-internet-expenses
Thank you for the great video. I have a question...I have a full time job and last year I started reselling on Poshmark and Mercari but I don't have a 1099. Could I use some of these write offs? I have a dedicated area for my business, inventory, packing, shipping expenses , etc.
Hi, Milagros! Yep, if you run an online selling business - even as a side hustle - you can definitely take those write-offs. The ones you listed are great examples! Here's a longer list of potential write-offs for people who sell inventory online: www.keepertax.com/tax-write-offs/online-seller
This was great! If you have 2 different 1099 businesses , one where you need a to rent a space and the other where you work from home, can you then claim both rent and home office expenses?
Just started my LLC & I currently am a permanent w2 employee working from home, I want to dedicate my entire basement to be completely classified as my home office 900 sq ft. I want to fix it up, add running water, office furniture a TV. and add it under expense for my new LLC. Would this be allowable under the tax code?
Great question! Renovating your basement is a great way to secure a home office deduction. The clear separation between your personal space and your office space is exactly what the IRS looks for in gold-star home offices. Short answer: Yes, this is allowable. The TV, on the other hand might not be. It probably be considered a personal expense unless you can demonstrate otherwise. Do you plan to regularly meet with clients or hold work meetings in your home office? If yes, you can probably make a case for the TV. Many offices have a TV in their reception area, or use them for presentations in work meetings. Depending on the nature of your business, there could be other work-related reasons to have one. Just be sure you can articulate what they are. The risk factor here is that if the IRS deems your TV to be “personal,” you could loose the whole deduction altogether. The big rule with home offices is that they need to be exclusively for work, so you could jeopardize your case by also using the space as a home theater.
I have a home office and I will be taking advantage of all these tax deductibles! Am I able to write off my desk and other equipment if I purchased them in a previous year but never claim them before?
Great question, Gloria! There's a slightly complicated answer. It depends on whether your business has been consistently profitable, or lost money the year you purchased your home office furniture and equivalent. If you did have a business loss that year - caused in part by the expenses of outfitting your home office - you can use that loss to offset your income this year or in a future year and in that way indirectly deduct your office equipment late. You can read more about business losses here: www.keepertax.com/posts/business-losses or watch this video: ua-cam.com/video/A_f87K3ZtB4/v-deo.html Unfortunately, if you were profitable the year you bought the desks, you can't deduct them alongside this year's expenses. You do have the option of filing an amended return, though. This would basically be a redo of your taxes for the year you bought the equipment, and it would be on Form 1040X. You just have to do that within three years of the year you're amending
Thank you so much for making these videos. How about if I have both W-2 and 1099. I am a full time employee and also independent contractor working from home for both jobs which require computer work. I am still qualified for home office deduction?
Thanks a bunch for the information! What about lunch during work, is that tax-deductible? When I was working as an employee in an office setting, we often had catering lunch. I am now a freelancer working from home. If I treated myself lunch during work hours, is that considered a tax-deduction?
Hey, Bryan! That's a great question. If you go out to lunch by yourself, then I'm afraid it isn't a deduction. But if you eat with someone - a current or potential client, or another person in the same field - and chat about work during your meal, then it's tax-deductible! We actually have a video that's all about meal deductions: ua-cam.com/video/ogNMzQHEWBU/v-deo.html
Hi, Nancy! Are you already using the Keeper app? If so, you can get help with your taxes by chatting with your tax assistant. You can also send an email to support@keepertax.com - they'll be able to answer your questions
Good question! If you're wondering how much you'll save on each of your home office expenses, that depends on your effective tax rate. You can estimate what yours would be using this self-employment tax rate calculator: www.keepertax.com/self-employment-tax-rate-calculator
Great video and information. I don't know if I missed it or not but what if you are a full time employee for a company but do gig work on the side for yourself. Can you claim a home office deduction for your gig work? Thank you.
Hi thank you for sharing. you said property tax can be a write off as business expense. but what if I ve already use standard deduction. can I still write it off?
Actually, yes! The caveat is, you can only write off the business-use percentage of your property tax on top of the standard deduction. So if your home office is 10% of your square footage, you can write off 10% of your property tax as a business expense. (Think of it this way: the standard deduction basically "trades off with" the personal-use portion of your property taxes.)
I own a cleaning company. Can I write off closet/storage place as well as my home office? Supply space is in the basement and office space is on the main floor.
Hi, Jessica! As long as you only use both spaces exclusively for your cleaning business (as opposed to, say, sometimes watching movies in your home office), you can! It's no problem that the two spaces are on different floors - the IRS only cares what percentage of your home you use as a workspace.
If your using the 16% of the square footage of your home, would that mean that you would also take 16% off of your renters/homeowners insurance? Also, if you have an LLC, you need to keep your personal and business finances relatively separate. How would you do this when you are paying for toilet paper, rent, etc with your personal account and not your business account? TIA!
Hi, Rebekah! That's correct - if 16% of your home is used as a home office, you can claim 16% of your home insurance. If you'd like to learn more about how this deduction works, check out this article! www.keepertax.com/posts/is-home-insurance-tax-deductible If you keep your business and personal finances separate, you'll want to debt "home office" for the amount of the deduction, and then credit "owner contributions." Essentially, this shows that the owner of the business - you - paid for those business expenses on the company's behalf out of personal funds.
Hi! To take the home office deduction using the regular method, you'll add up the actual amount you spend on home expenses for the year, then multiply that by the percentage of your home taken up by your office space.
@@KeeperTax Oh thank; I didn't realize Standard Deduction for single and married filing jointly went up a lot! Married is now over 27K so my deductions and donation needs to hit over that! Is it even worthied to do itemized schedule c deduction?
Great question, Dissaya! You'll want to fill out two Schedule Cs - one for each business - and track your write-offs for each of them separately. Since you run these businesses out of your home, however, you'll be able to split your home office deduction between them. You can calculate your total home office deduction, then prorate it between the two businesses based on the percentage of gross income they bring in. If one of your businesses accounts for 70% of your gross self-employment income, for example, you can assign 75% of your home office deduction to that business.
8:44 … how do I differentiate what I should claim 100% of in the app (versus the home-office space percentage)?? Does this mean that if I buy a home office chair, solely used in my home office for work, that I get the entire price of the office chair back? OR do I get my tax income bracket percentage deducted? Example) chair from office depot - $150 ; do I get $150 that I can claim? Or can I only claim $150 x [30%] ? (using 30% as my tax bracket)
Good question! You're right that a 100% deduction doesn't mean that 100% of the amount you spent on your office chair gets subtracted from your tax bill. It means that it gets subtracted from the amount of income you get taxed on. So if you earned $1,000 but spent $150 on a home office chair that you then write off, you'll be taxed on $850 instead of the full $1,000. As far as the home office percentage goes, that's a separate issue! That has to do with home much of an expense you're allowed to subtract from your taxable income in the first place. For your chair example, that's absolutely 100% since you only use it in dedicated workspace. But for something like your power bill - which you benefit from both in and out of your workspace - you'd have to claim the business-use percentage. only. For help designating something as a 100% write-off, versus a business-use percentage write-off, you can with a tax assistant right in the "Tax Help" tab in the app!
Great information! I built a separate building detached from my home that cost about 30k in 2021 that is 192sqft and my main house is 2121 sqft. Would I be able to write off the whole 30k as literally that is my home office and used exclusively for that. How would I go about this for my 2021 taxes (I'm taxes as an s-corp FYI) thank you!!
Hi, Matthew! In this case, you'd just list your building as a fixed asset and depreciate it normally, instead of treating it as a home office. If you have any utilities or property taxes that are split between business and personal, you'd apply a business-use percentage and list those as regular expenses for your S corp. There's no form or anything you'd need to submit to show your work - just keep notes in case of an audit! Finally, for bookkeeping purposes, you'd debit the appropriate expense accounts and credit "owner contributions".
I have 2 home offices. One is a designated room office. This is my husband's office. The other is my master bedroom closet which I converted into an office for myself. How do I claim them altogether with the square footage combined as one office space? Also what of you work from other office desk like your children's room of their homeschooled and you work along side them on their desk. Is that considered a office desk as well? If so do you measure the desk in the children's room?
Great question! If you and your husband are both self-employed, you can claim both offices together simply by adding up their square footage, just as if they were one continuous space. The IRS doesn't actually care that they're in separate rooms, as long as you use both exclusively for work! The desk in your children's room, however, likely wouldn't be deductible
@@KeeperTax Thank you so much I really appreciate you answering me back. 😊 You got a sub for sure! I like what your doing here. Also congrats on the new pad!
Hi Tyra, what if the business is on Marketing and PR industry, how do I categorize their purchases on pharmacy and supermarket( I have no other references on the items purchased, only the name of the vendor) ? Thank you!
Hey Amelia! It sounds like you're doing some bookkeeping for a client? Supermarkets and pharmacies sell a bunch of office supplies like pens and printer paper, so this situation probably isn't uncommon! It's good to know what types of purchases they're making at those stories. (Stopping by for printer paper when they're on the way back home from work? Stocking up on snacks for a shared office space?) That way, you'll know which Schedule C category to put them in. (For more information, on that, check out our guide to filling out Schedule C: www.keepertax.com/posts/schedule-c) The good news is, if their transactions at the pharmacy or supermarket totaled less than $75, you don't actually need a paper receipt for it! Here's an article where you can learn more: www.keepertax.com/posts/receipts-for-taxes
THANK you so much for this info. I recently became an online product reviewer for an online store. They pay me thru the merchandise they give me to review (which can add up pretty quickly.) They told me I will be receiving a 1099. I'm concerned of the taxes I'm going to have to pay on these products. I don't write reviews weekly.. just every other week. Would this home office deduction still apply in my case?
Hi, there! Great question - and very cool gig. As long as you write your reviews from home and don't have access to any kind of an outside office or coworking space, you can take the home office deduction.
Good question, George! You would write off 16% of anything where your use of the expense is split between business and personal. That would include your rent and Wi-Fi - the bills you're paying for those cover your whole place, not just the home office. For anything that's only used in your office, though, you actually get to write off 100%. That includes the desk in your example, and also anything like a work-only desktop, monitor, or chair.
@@carebear4554 Hi! You can claim WiFi on your Schedule C if you're not taking the home office deduction. You'll report that on line 25. Check out this article for more info! www.keepertax.com/posts/how-to-deduct-internet-expenses
Good question, Meli! You don't have to own the home - you can definitely still claim home office expenses if you work out of a rented home! In fact, then you can deduct a portion of your rent
Hi! Thank you for your informative contents!! Am learning a lot! I am a newbi real estate investor. Can I write off this , meals, driving all that this before make income? I just created my LLC. I have only 3month left to make income even though I am working to make it. I am investing in apartments so it take kind of time to make income.
Hi, Rose! Congrats on getting your new business off the ground. You can write off investigative startup costs like what you describe even if you incurred them before you started to turn a profit! You can start claiming them starting from the day you registered your LLC. Here's an article where you can learn more: www.keepertax.com/posts/startup-costs
Hi, Chrissy! Bad news: Since the Tax Cuts and Jobs Act, W-2 employees can't write off home office expenses. It's too bad, since, like you said, so many people are WFH now
Great question! The situation for homeowners is a little more complicated than for renters. You'd only be able to deduct the business-use portion of what you're paying on mortgage INTEREST- not the whole house payment.
Great question, Victoria! If you live in a hotel, the home office deduction probably wouldn't make sense for you. But it makes a lot of sense to claim your car expenses! Here are a couple of videos you can watch to learn more: ua-cam.com/video/cRj5t3BYKec/v-deo.html ua-cam.com/video/E_mJYXfwg8g/v-deo.html
Thank you so much! I have been selling online for years and never used a single write off. I’m only 26 and I’m the first person in my family to work for myself so I am still learning. I cannot believe I didn’t know any of these! Thank you so so much you just saved me so much money. 😊
so in your example, you said 16% of the office space can be calm. How do you get a dollar amount of the 16%? Do you add all your utilities up and claim 16% of that? sorry I am a little confused. lol
Thank you for all these information especially having your work desk in your bedroom. I thought the work area has to be a separate room. I'm so glad this doesn't have to be the case. You got me hooked on your channel Ma'am. I really enjoy tunning in.
Thanks for watching!
Im a full time employee receiving a w2, opened my own online store, and stream games on Twitch under my LLC. I use my room to broadcast! Am i able to measure my work room, closet for storage, and hallway to the restroom? I am learning how to do write offs. Love the vids!! Thank you
Great video. As a new small business owner at home , trying to learn all of this can be overwhelming 😆
Thanks for watching, Chris, and congrats on starting your journey as a business owner!
Thank you for your videos I have been searching about a month to have all this explained in a way I understood it. I have a Major question, in a comments section (someone else’s video) they posted that people need to be aware that if they claim a home office when you sell your home they will take a portion of your profit from selling the home because it means that your business owns a %. So people need to be weary if they are still paying a mortgage. So if you decide not to claim a home office because of this (planning to sell your home soon) can you still deduct other expenses such as wifi? Also do you recommend an excel sheet for trying income and expenses at least for beginners?
Great questions! This would actually only affect offices outside the home - something like a separate work shed or unattached garage. Offices inside the home are covered by the primary residence tax exclusion - meaning that, when the home sells, up to $250,000 of gain is excluded for single filers (or $500,000 for a married couple filing jointly.)
There's also the issue of depreciation recapture, which the IRS uses to stop us from "double-dipping" with tax breaks. That means any depreciation you claimed over the years (or could have claimed) will be taxed at your regular income tax rate (maxing out at 25%). So if you've taken $20,000 in depreciation, you could owe up to 25% of that, which is $5,000. (That's probably still less than what you've saved on your taxes by claiming that depreciation!)
As for your final question, we've got a couple spreadsheets we recommend! Here's one just for home office expenses: www.keepertax.com/posts/home-office-deduction-excel-spreadsheet
And here's one for business expenses in general: www.keepertax.com/posts/1099-excel-template
Thank you!! This is Awesome and Clear! Appreciate your work. :)
Yesss love it!! New subscriber alert! Getting some great infor for my taxes for next tesrr
I love your channel!
You’re amazing. This presentation was brilliant.
Hello and thank you for these very informative videos, i wanted to ask wether or not it is allowed to utilize home deductions in a home that is in my parents name, i do operate out of my home office more than once a week and have an entire room as my work space/home office. However i am wondering if the home needs to be in my name to claim it as a write off for my small business which is an LLC with myself as the one and only sole proprietor. Please let me know any advice you may have, Thank you!
Can a door dasher use home office?
is this available without bloopy noises?
great video, thank you
If I use my office for my 9 to 5, but also use it for my business 24 hours a week, can I write this off? It seems like it'd be a shame to not be able write off my home office taxes because I use the same desk for my 9 to 5.
Sorry if I’m confused, but in some parts of this video you say “partial write off.” Where others you say, “write off.” Ie, when you were talking about writing off WiFi. It sounded like you were saying I can write off the whole Wi-Fi bill and not the calculated percentage. How do I know when to write the whole thing off, versus the percentage?
Hey! You can write off the business-use percentage of your internet. For example, pretend you use your internet for client communications 40% of the time, and for Netflix, TikTok, and online shopping the other 60% of the time. You can write off 40%! More here: www.keepertax.com/posts/how-to-deduct-internet-expenses
Thank you for the great video. I have a question...I have a full time job and last year I started reselling on Poshmark and Mercari but I don't have a 1099. Could I use some of these write offs? I have a dedicated area for my business, inventory, packing, shipping expenses , etc.
Hi, Milagros! Yep, if you run an online selling business - even as a side hustle - you can definitely take those write-offs. The ones you listed are great examples! Here's a longer list of potential write-offs for people who sell inventory online: www.keepertax.com/tax-write-offs/online-seller
Thank you for your answer and link. Both are so helpful! I appreciate you took time of your busy schedule to answer my questions 💐💝
Can deduct home office if you operate at a loss?
This was great! If you have 2 different 1099 businesses , one where you need a to rent a space and the other where you work from home, can you then claim both rent and home office expenses?
yes
Thanks so much! You mentioned rent write off, can you write off mortgage, or just insurance and property taxes?
Really good question! You can write off the interest portion of your mortgage payments, but not the principal
Everybody can write off mortgage interest provided they itemize--even if they’re not self employed/1099.
Just started my LLC & I currently am a permanent w2 employee working from home, I want to dedicate my entire basement to be completely classified as my home office 900 sq ft. I want to fix it up, add running water, office furniture a TV. and add it under expense for my new LLC. Would this be allowable under the tax code?
Great question! Renovating your basement is a great way to secure a home office deduction. The clear separation between your personal space and your office space is exactly what the IRS looks for in gold-star home offices.
Short answer: Yes, this is allowable. The TV, on the other hand might not be. It probably be considered a personal expense unless you can demonstrate otherwise. Do you plan to regularly meet with clients or hold work meetings in your home office? If yes, you can probably make a case for the TV. Many offices have a TV in their reception area, or use them for presentations in work meetings. Depending on the nature of your business, there could be other work-related reasons to have one. Just be sure you can articulate what they are.
The risk factor here is that if the IRS deems your TV to be “personal,” you could loose the whole deduction altogether. The big rule with home offices is that they need to be exclusively for work, so you could jeopardize your case by also using the space as a home theater.
Do the home office expenses need to be paid from a business account or can you pay from a personal account as well?
You can pay for them out of a personal account!
I have a home office and I will be taking advantage of all these tax deductibles! Am I able to write off my desk and other equipment if I purchased them in a previous year but never claim them before?
Great question, Gloria! There's a slightly complicated answer. It depends on whether your business has been consistently profitable, or lost money the year you purchased your home office furniture and equivalent. If you did have a business loss that year - caused in part by the expenses of outfitting your home office - you can use that loss to offset your income this year or in a future year and in that way indirectly deduct your office equipment late. You can read more about business losses here: www.keepertax.com/posts/business-losses or watch this video: ua-cam.com/video/A_f87K3ZtB4/v-deo.html
Unfortunately, if you were profitable the year you bought the desks, you can't deduct them alongside this year's expenses. You do have the option of filing an amended return, though. This would basically be a redo of your taxes for the year you bought the equipment, and it would be on Form 1040X. You just have to do that within three years of the year you're amending
Thank you so much for making these videos. How about if I have both W-2 and 1099. I am a full time employee and also independent contractor working from home for both jobs which require computer work. I am still qualified for home office deduction?
I’m interested in this too.
Hi, Ali (and Nick)! Great question, and yes, you can still take the home office deduction!
Does it end up being a percentage of hours used for 1099 vs w2 or you can write up the whole sqrt ft?
FIRRREEE!!!!! Sooooo Helpful and Useful!!
Awesome!!! Thank you
Thanks a bunch for the information! What about lunch during work, is that tax-deductible? When I was working as an employee in an office setting, we often had catering lunch. I am now a freelancer working from home. If I treated myself lunch during work hours, is that considered a tax-deduction?
Hey, Bryan! That's a great question. If you go out to lunch by yourself, then I'm afraid it isn't a deduction. But if you eat with someone - a current or potential client, or another person in the same field - and chat about work during your meal, then it's tax-deductible! We actually have a video that's all about meal deductions: ua-cam.com/video/ogNMzQHEWBU/v-deo.html
this was so helpful! Thank you so much.
I Need to File Using this Software for my 2022, 2021, Year
Hi, Nancy! Are you already using the Keeper app? If so, you can get help with your taxes by chatting with your tax assistant. You can also send an email to support@keepertax.com - they'll be able to answer your questions
So will I calculate all that you mentioned at 16% each?
Good question! If you're wondering how much you'll save on each of your home office expenses, that depends on your effective tax rate. You can estimate what yours would be using this self-employment tax rate calculator: www.keepertax.com/self-employment-tax-rate-calculator
Great video and information. I don't know if I missed it or not but what if you are a full time employee for a company but do gig work on the side for yourself. Can you claim a home office deduction for your gig work? Thank you.
Hi, James! Great question. If you otherwise qualify for the home office deduction, you can claim it even if you only do self-employed work part-time.
Hi thank you for sharing. you said property tax can be a write off as business expense. but what if I ve already use standard deduction. can I still write it off?
Actually, yes! The caveat is, you can only write off the business-use percentage of your property tax on top of the standard deduction. So if your home office is 10% of your square footage, you can write off 10% of your property tax as a business expense. (Think of it this way: the standard deduction basically "trades off with" the personal-use portion of your property taxes.)
I own a cleaning company. Can I write off closet/storage place as well as my home office? Supply space is in the basement and office space is on the main floor.
Hi, Jessica! As long as you only use both spaces exclusively for your cleaning business (as opposed to, say, sometimes watching movies in your home office), you can! It's no problem that the two spaces are on different floors - the IRS only cares what percentage of your home you use as a workspace.
Great content. Thanks a bunch!
If your using the 16% of the square footage of your home, would that mean that you would also take 16% off of your renters/homeowners insurance? Also, if you have an LLC, you need to keep your personal and business finances relatively separate. How would you do this when you are paying for toilet paper, rent, etc with your personal account and not your business account?
TIA!
Hi, Rebekah! That's correct - if 16% of your home is used as a home office, you can claim 16% of your home insurance. If you'd like to learn more about how this deduction works, check out this article! www.keepertax.com/posts/is-home-insurance-tax-deductible
If you keep your business and personal finances separate, you'll want to debt "home office" for the amount of the deduction, and then credit "owner contributions." Essentially, this shows that the owner of the business - you - paid for those business expenses on the company's behalf out of personal funds.
Very nice video so do you show monthly expense then total that for 12 months and then you write off 12 months worth not just one month?
Hi! To take the home office deduction using the regular method, you'll add up the actual amount you spend on home expenses for the year, then multiply that by the percentage of your home taken up by your office space.
@@KeeperTax Oh thank; I didn't realize Standard Deduction for single and married filing jointly went up a lot! Married is now over 27K so my deductions and donation needs to hit over that! Is it even worthied to do itemized schedule c deduction?
Hi! What if I had 2 businesses at home?! How does it work with the write-offs? Thank you so much!!
Great question, Dissaya! You'll want to fill out two Schedule Cs - one for each business - and track your write-offs for each of them separately.
Since you run these businesses out of your home, however, you'll be able to split your home office deduction between them. You can calculate your total home office deduction, then prorate it between the two businesses based on the percentage of gross income they bring in. If one of your businesses accounts for 70% of your gross self-employment income, for example, you can assign 75% of your home office deduction to that business.
8:44 … how do I differentiate what I should claim 100% of in the app (versus the home-office space percentage)??
Does this mean that if I buy a home office chair, solely used in my home office for work, that I get the entire price of the office chair back? OR do I get my tax income bracket percentage deducted? Example) chair from office depot - $150 ; do I get $150 that I can claim? Or can I only claim $150 x [30%] ? (using 30% as my tax bracket)
Good question! You're right that a 100% deduction doesn't mean that 100% of the amount you spent on your office chair gets subtracted from your tax bill. It means that it gets subtracted from the amount of income you get taxed on. So if you earned $1,000 but spent $150 on a home office chair that you then write off, you'll be taxed on $850 instead of the full $1,000.
As far as the home office percentage goes, that's a separate issue! That has to do with home much of an expense you're allowed to subtract from your taxable income in the first place. For your chair example, that's absolutely 100% since you only use it in dedicated workspace. But for something like your power bill - which you benefit from both in and out of your workspace - you'd have to claim the business-use percentage. only. For help designating something as a 100% write-off, versus a business-use percentage write-off, you can with a tax assistant right in the "Tax Help" tab in the app!
Great information! I built a separate building detached from my home that cost about 30k in 2021 that is 192sqft and my main house is 2121 sqft. Would I be able to write off the whole 30k as literally that is my home office and used exclusively for that. How would I go about this for my 2021 taxes (I'm taxes as an s-corp FYI) thank you!!
Hi, Matthew! In this case, you'd just list your building as a fixed asset and depreciate it normally, instead of treating it as a home office. If you have any utilities or property taxes that are split between business and personal, you'd apply a business-use percentage and list those as regular expenses for your S corp.
There's no form or anything you'd need to submit to show your work - just keep notes in case of an audit!
Finally, for bookkeeping purposes, you'd debit the appropriate expense accounts and credit "owner contributions".
Thank you so much
I have 2 home offices. One is a designated room office. This is my husband's office. The other is my master bedroom closet which I converted into an office for myself. How do I claim them altogether with the square footage combined as one office space? Also what of you work from other office desk like your children's room of their homeschooled and you work along side them on their desk. Is that considered a office desk as well? If so do you measure the desk in the children's room?
Great question! If you and your husband are both self-employed, you can claim both offices together simply by adding up their square footage, just as if they were one continuous space. The IRS doesn't actually care that they're in separate rooms, as long as you use both exclusively for work!
The desk in your children's room, however, likely wouldn't be deductible
@@KeeperTax Thank you so much I really appreciate you answering me back. 😊 You got a sub for sure! I like what your doing here. Also congrats on the new pad!
Hi Tyra, what if the business is on Marketing and PR industry, how do I categorize their purchases on pharmacy and supermarket( I have no other references on the items purchased, only the name of the vendor) ? Thank you!
Hey Amelia! It sounds like you're doing some bookkeeping for a client?
Supermarkets and pharmacies sell a bunch of office supplies like pens and printer paper, so this situation probably isn't uncommon! It's good to know what types of purchases they're making at those stories. (Stopping by for printer paper when they're on the way back home from work? Stocking up on snacks for a shared office space?) That way, you'll know which Schedule C category to put them in. (For more information, on that, check out our guide to filling out Schedule C: www.keepertax.com/posts/schedule-c)
The good news is, if their transactions at the pharmacy or supermarket totaled less than $75, you don't actually need a paper receipt for it! Here's an article where you can learn more: www.keepertax.com/posts/receipts-for-taxes
THANK you so much for this info. I recently became an online product reviewer for an online store. They pay me thru the merchandise they give me to review (which can add up pretty quickly.) They told me I will be receiving a 1099. I'm concerned of the taxes I'm going to have to pay on these products. I don't write reviews weekly.. just every other week. Would this home office deduction still apply in my case?
Hi, there! Great question - and very cool gig.
As long as you write your reviews from home and don't have access to any kind of an outside office or coworking space, you can take the home office deduction.
Yes ima Olán do get a home office
7:07 With the example that you gave, would you write 16% of every item? So rent 16%, wifi 16%, desk 16%, etc
Good question, George! You would write off 16% of anything where your use of the expense is split between business and personal. That would include your rent and Wi-Fi - the bills you're paying for those cover your whole place, not just the home office. For anything that's only used in your office, though, you actually get to write off 100%. That includes the desk in your example, and also anything like a work-only desktop, monitor, or chair.
@@carebear4554 Hi! You can claim WiFi on your Schedule C if you're not taking the home office deduction. You'll report that on line 25. Check out this article for more info! www.keepertax.com/posts/how-to-deduct-internet-expenses
Do you have to "own" the home or can you do this from a home you rent?
Good question, Meli! You don't have to own the home - you can definitely still claim home office expenses if you work out of a rented home! In fact, then you can deduct a portion of your rent
Hi! Thank you for your informative contents!! Am learning a lot! I am a newbi real estate investor. Can I write off this , meals, driving all that this before make income? I just created my LLC. I have only 3month left to make income even though I am working to make it. I am investing in apartments so it take kind of time to make income.
Hi, Rose! Congrats on getting your new business off the ground. You can write off investigative startup costs like what you describe even if you incurred them before you started to turn a profit! You can start claiming them starting from the day you registered your LLC. Here's an article where you can learn more: www.keepertax.com/posts/startup-costs
Yes I have a home office
Nice! Don't forget to take advantage of the write-off 😉
@@KeeperTax Thank you one of our reasons for choosing Keeper Tax
Beautiful 🎉
Do I have to own a business? During the Pandemic, a lot of us are working from home. I got a room finished in my home to work, can I write this off?
Hi, Chrissy! Bad news: Since the Tax Cuts and Jobs Act, W-2 employees can't write off home office expenses. It's too bad, since, like you said, so many people are WFH now
@@KeeperTax oh wow. Thank you. This is horrible. It’s crazy there was no incentive for those you who had to use their homes for their home office.
Thank u
You say rent but does that also include house payment
Great question! The situation for homeowners is a little more complicated than for renters. You'd only be able to deduct the business-use portion of what you're paying on mortgage INTEREST- not the whole house payment.
@@KeeperTax what about property taxes?
@@CR-pf1es Yep, you can deduct a portion of your real estate taxes corresponding to your business-use percentage!
What can I claim if I'm a driver that lives in a hotel?
Great question, Victoria! If you live in a hotel, the home office deduction probably wouldn't make sense for you. But it makes a lot of sense to claim your car expenses! Here are a couple of videos you can watch to learn more:
ua-cam.com/video/cRj5t3BYKec/v-deo.html
ua-cam.com/video/E_mJYXfwg8g/v-deo.html
Amazing
Awesome
💗💗💗💗
#keepertaxusa