7 Popular Tax Write Offs That Could Trigger an IRS Audit
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- Опубліковано 20 чер 2024
- I have 7 tax write-offs, that you can take, but if you're not careful they can land you in trouble with the IRS
Book a Discovery Call: schedule.lyfetaxes.com/discov...
Because once people fall in love with saving taxes, there's really no limit to what people will try to write off for the sake of their business
So in this video, we're going to look at
- Why Some Tax Write-Offs Get You In Trouble
- 9 Tax Write-Offs you have to be careful with
- Tips to Help you Stay out of Trouble
Time Stamps
Intro (0:00)
Reason #1 (1:25)
Reason #2 (2:45)
Reason #3 (3:30)
Write Off #1 (4:30)
Write Off #2 (6:05)
Write Off #3 (7:15)
Write Off #4 (8:50)
Write Off #5 (9:40)
Write Off #6 (10:17)
Write Off #7 (11:00)
Bonus Tip (12:50)
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Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).
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Basically, just be honest. If it's a gray area, stay on the safe side and consult a CPA. Thanks for the video, it has good information. The summary in my mind is use honesty and diligence.
I probably don't write off enough. I started mobile food business last year and didn't even have to buy any expensive equipment. I already had a flat top griddle, pop up tent and other supplies from the house. I only have inventory, liability insurance, supplies, licenses, propane and cellphone for accepting credit cards. I couldn't write off any vehicle expenses because I drive from my house to my location and back home. I have my food inventory delivered to my house.
This was great, thank you!
Good advice, good information. Thank you.
Thank you 😊 💓 I hope I can apply this knowledge, 🙏
Thanks for this informative video.
Love your videos! Keep them coming.
Thank you, Abbey! Will continue to do my best.
Very helpful information
This was so helpful! Filing my first year's business taxes and this was so great!! THANK YOU!
Love this!
Amazing content! Thank you. #subscribed
I want to be like you when I grow up. Great video man!
Thank you for the info, and thank you, Algorithm, for feeding this to me. I’m doing taxes right now for my wife’s at-home daycare business and my W2 income, filing jointly.
Glad you found us because based on your situation, you're going to get a ton of great information from watching our videos
Epic thanks
Clever subscribe technique, I am already subbed, but I like it!
Haha I appreciate that!
I like your videos.
Excellent vídeo. Thanks
Glad you liked it!
@@LYFEAccounting hey I have a question. BTW Greetings from Peru. I'm an independent contractor with a US company in NC. Do they need to give me a statement of wages/fees paid to me for my taxes in the US?
Can you make a video on Accountable Plans for S Corp?
Thanks for all your help. My accountant was impressed that I knew about the solo 401K. Question when they say up to 23 % in taxes you have to pay does that include the 15.3 % for social security ? Or you don't have to pay it?
thanks for the informative video. my business need sofa and refrigerator. but it doesn’t fit in the small dedicated office room. if i put in living area. can I write off portion of it?
Are you working from home (primary residence) or in a commercial/investment property?
@@LYFEAccounting yea I am working from home (primary residence)
Can travel for an investment property can that be a write off?
What about digital receipts? Do they apply the same as physical receipts, given we are in the age of technology? I keep an excel log of all applicable business expenses and have files with the relevant receipts.
my llc started in december 2021
I am not filing taxes and not showing startup expenses for the year 2021 as there is no business activity.
so can I show start up expenses in my next year tax filing in 2022 taxes?
Bruce is my guard dog. Protection. 🎉
And you write off all his expenses?
When I did NY taxes and it said I was getting a refund but now it's saying I am not getting a refund. I don't know why but I'm trying to get in touch with someone because I don't know why it did this. I did my own taxes the last 3 year and I went to a pro to check and make sure I did it right so what can I do to find out
I started a sound production/DJ business. Can and how do you write off equipments that will be use in the businese that you already own before starting your business? I will be buying more equipment too
You transfer the equipment to ownership under your COMPANY not yourself.
Glad I did this search! You have a new subscriber. Quick question...what if you don't own a home yet, and are renting and have a work space?? Does this still apply?
Glad you found us too, Tiffany! So I think you're asking about the home office tax deduction, right?
@@LYFEAccounting Hey I'm going to respond for her if you don't mine. Yes that is exactly what she saying
Hey, what's that in the sky! LOL
🤣🤣
Printed receipts fade & disappear...
Indeed, it's definitely important to scan your receipts (assuming you want to use them for a legal tax deduction)!
Make a photocopy or use an app which converts them into PDF
Hey my name is Damion I’m 19 and out of Texas. I currently work in a Collision shop doing paint/body work on cars. I just had a little shop built at my parents house where I currently still live. I have been doing a little bit of side work out of my shop but I have been just getting paid cash for everything I do! But I want to form a llc a business with just my self for my shop so I can start writing stuff off like tools and etc… Do you think I should start a llc for my shop and take in most of the income as cash and then the rest of the money as my annual income (that I get taxed on) or should I just not start a llc ? and just stick with just making cash on the side? If there’s a phone number I can call that would be great! I have been watching all your videos and been taking notes also! I’m learning so much! Like I said I’m 19 I would rather make business mistakes young and learn from them so when I’m older I won’t have to worry so much!
An LLC is ideal for someone making good money but also has a risk of being sued. This will eliminate people coming after your personal assets. An LLC will also change up how you do your taxes compared to sole proprietorship. Google and UA-cam help answer a lot of questions when it comes to which is the better route, but so is talking to a professional 🤘
How can you do my taxes ? My current person is not as knowledgeable as you are.
If I have a plan that has 5 phones and I use one phone strictly for my new business can I write off 1/5 of the bill and the cost of that phone?
I think that’s the correct way to go! Even better if you can see the specific costs for that phone line
Great video! I have a quick question, if you have a tax due amount (line 16 of 1040) of $10k and you have a nonrefundable tax credit of 5k, and you’ve withheld $15k from your paychecks throughout the year, how much will you receive (or pay) after filing your tax return?
And is line 16 also my “tax liability”? The terms are throwing me off a tad bit: tax due vs tax liability.
Your return will be 10k. The 10k on line 16 is your "tax liability." Nonrefundable credits can drop your tax to $0, but not negative. So you'd owe 5k in taxes, but because you have 15k withheld, you are owed 10k. If your liability was larger than 15k, that amount due would be your "taxes due".
@@megandrewm5450 thank you!
Meg's answer is hypothetically correct, assuming that you are withholding enough according to your income and that hasn't already been factored into the tax due
I take pictures of each receipt. Send it to an asistant who then saves the picture onto an excel sheet with business reason. Date and time. Is that fine? Or do I still need to keep the hard copy ?
Scans or pictures of your receipts with a sheet can be fine, that’s actually great that you’re doing that!
I put my receipts in zip lock bags, write down the dates, the amounts and stores.
TEACH!!
Doing my best 😃
And is scanning the receipts to your app an acceptable form of tracking your expenses or so I need the actual receipt
Scanning receipts are acceptable and common for many businesses
What if I have an LLC and I do taxes with my husband?
Mag?
how much more of the blanket does the IRS have to pull before people start realizing that they're laying in the cold? It's like the frog in the boiling water experiment.
as a flight instructor = coffee. necessary expense.
should my 1040 schedule c match my companies financial statement for self employed exactly? Like once I enter everything, there are differences like car/truck expenses, meals and entertainment, depreciation. Am i supposed to go back and enter journal entries to make them both match?
Make a sch c spreadsheet and total each category into
Separate files and include the vendor date and expense and any notes for
The expense if needed.
Then a separate file of the receipts scanned/photocopy or even bank statements highlighting those expenses will work. That way your files
For the worksheet you make will all match up to your schedule c you filed and you have the invoices/statements to back it up.
LYFE Accounting, what about a UA-camr who reviews business class flights?
I already have computer desk which I bought beginning for $1000 of 2021 and I opened business at the end of 2021. for 2021 taxes can I claim that $1000 as startup cost?
You bet homie. As long as you have proof of purchase (in case of audit) to show when and how much you paid 🤘
@@wannabeskateboards purchase date is before the business opening. so what percentage of the cost can i write off?
@@vineelp it’s still a start-up cost. Doesn’t matter if your business wasn’t quite open before you purchased. You’ll need to research how much ‘cause I’m not a professional lol.
Yes, this would be considered a startup cost and you can deduct $5,000 in startup costs before you launch your business. After $5,000 you must amortize the costs. I have a video that breaks this down more here: ua-cam.com/video/HwI8PCy7HDM/v-deo.html
@@LYFEAccounting Thank you
What’s a good app to use to track mileage and receipts?
You can use Quickbooks app for most things and, Mileage IQ specifically business miles
In 2022.. there is this thing called the credit cards keep tract of the transactions there for receipts are pretty obsolete
Pretty much most of these things are not applicable to passive real estate
Everything is ok, nothing to see here lmao 🤣
🤣🤣
What movie are these clips from ?
I think they’re from show called Schitt’s Creek
Yup, Jamie is right, it's from Schitts Creek
Or you could just write off 100% of your cell phone expense because procedurally, the IRS does not require you to allocate this expense (and they haven't for more than a decade).
Everything is pretty much a red flag. Lol
You've got to be careful lol
But, but the rich get free passes🤔🤔
If you pay for something on your business credit card are the payments you make to pay back the card tax deductible
Yes. Using a credit card is like cash and is recognized in the period incurred. For example, if you buy something on 12/31/2021 with your credit card, that expense is for the 2021 year even if you have a balance on the card and pay it off on 1/1/2022 (paying off the balance is just moving cash to accounts payable on the balance sheet and in itself is not an additional expense, just the closing of a payable already recognized). Interest expense is also tax deductible, but there are limitations on how much interest you can pay based on your net income. This falls under §163(j) for business interest expense limitation (limited to 30% of AGI), though it is unlikely that credit card debt alone will trigger this scenario.
Yes, as long as the transactions on the business card are qualified expenses. You may also deduct the any interest incurred on the business credit card as well.
How would they know tho ? lol
I took one of my best customers to a strip club and paid for multiple lap dances, can I can write that off??
Are you all accepting new clients yet?
Yes, we're actually about to start winding down. Check lyfetaxes.com if you need to book
1. Exaggeration
2. Disproportionate to your income from business, running loss year after year
3. Unnecessary purchases
4. Misreporting
5. Travel expenses not related to business
6. Cell phone expenses, grey area, use only percentage you are using for business
7. Home office deduction.. must have a dedicated area for office, don't over report square footage
8. Family wages and salary, make sure responsibilities align with age
9. Personal expenses
10. Dog, only if company guard dog.. inventory, only portion of dog's time
11. Clothing expenses, only uniforms, with logo.. he made video you can watch
12. Substantiate tax cuts expenses, receipts etc.. keep everything related ,
12. Make sure you file your taxes
13.
First off why would you pay your child 80k. You should never pay your children more than 12,000 because that's the limit that is tax free
Sean, you're very intelligent, so STOP the corny jokes!
Dang ok
Whatever. He can be smart and corny.
@@dianefoster3059 thanks, Diane! 😊
I enjoy the jokes.
The a women on youtuber alica Dougherty dozen she spend a lot Money over spend on food about two thousand on food Christmas present clothes try write it off her youtube content are dropped over feed her kids junk food her garage is grocery store she write off her cars van sons jeep adopted eight kids
Are you serious I could get a dog and write off all his expenses of food and vet and all for a tax write off? I’ve never heard a better reason to get a dog
Also just common sense works outside of this video