Would probably spit me out for an audit...

[Dalmatian90]

I'm crossing every finger and appendage I'll be getting a job offer tomorrow (first "real" job in five years!)...I'll be based out of a home office.

Was looking at the IRS rules for home office deductions today...

After reading furnace repairs, electrical, and gas bills can be deducted pro-rated like the home office (if it's 20% of the home's square footage, that's 20% tax deductible...)

Then I pondered the Dolmar 7900 and other wood toys I've been eyeing and wondered just how chagrined the auditors would be :hmm3grin2orange: I do currently heat 100% with wood.

Not huge money, but figure 20% tax deduction works out to about a 5 or 6% discount on things in "real dollars"...would offset the sales tax anyways Though I might have to setup a depreciation schedule to do this...

(Yeah, mostly fantasizing since I don't see myself taking the time to try and squeeze out that small bit of savings...)

 

[Hedgerow]

I'll keep my fingers crossed for ya there Dalmation. As far as deductions? whew... I guess most anything's fair game. Just save those receipts!!!:msp_smile:

 

[atlarge54]

Just use Geithner and Dashel as a reference.

 

[olyman]

Just use Geithner and Dashel as a reference.

:hmm3grin2orange::hmm3grin2orange::hmm3grin2orange::hmm3grin2orange: good luck on that!!!!

 

[dave_dj1]

do yourself a favor and find a good accountant that hates the IRS, they can be your best friend, and if they do your taxes you are less likely to get audited.

 

[4seasons]

Right there with you

Between being unemployed and working a crap hole job late in the year combined with being a self employed truck driver where over 1/2 my income went to fuel I am a sure fire audit this year. When they come a calling I will respond "Well, I guess that makes my qualified for an Obama cabinet position."

 

[cuttingintime]

Good luck with the job, I hope it all works out for you. If you don"t have a strong back ground in accounting or administered duties. I would suggest you hire a professional. In my opinion it"s money well spent.

 

[CountryBoy19]

The easiest way I can think to do it legitimately is to set up a separate company owned and operated by you, that sells firewood. Your saws are tax-deductible business expenses for that company. You (you personally) buy the wood from your company and add that expense to your home utility bills.

Of course that means you're going to have to file taxes for the company too then.

There may be other ways to legitimately do it, but you definitely want to talk to a CPA about that, not a bunch of guys on a chainsaw forum. That is why I let a CPA handle my taxes. For less than $80 a year I can have the peace of mind knowing that a CPA answered all my questions and worked every angle possible to get me the most money back, and it all should be legitimate.

 

[avalancher]

The easiest way I can think to do it legitimately is to set up a separate company owned and operated by you, that sells firewood. Your saws are tax-deductible business expenses for that company. You (you personally) buy the wood from your company and add that expense to your home utility bills.
Dont even think about trying that routine unless you set your company up as an LLC or a corporation.As far as the IRS is concerned, you and your business are one and the same.years ago I ran a small construction company,and was the sole proprieter.Sold myself the building materials to build my shop and got nailed in an audit two years later.Ended up writing a check to the IRS for $16000 plus some change for just that year alone.

Of course that means you're going to have to file taxes for the company too then.

There may be other ways to legitimately do it, but you definitely want to talk to a CPA about that, not a bunch of guys on a chainsaw forum. That is why I let a CPA handle my taxes. For less than $80 a year I can have the peace of mind knowing that a CPA answered all my questions and worked every angle possible to get me the most money back, and it all should be legitimate.

.

 

[blades]

That will raise a red flag so fast the ink won't be dry from a ball point.

 

[MRNDAD]

You need a good accounting firm...feel free to use mine...Dewey, Cheatem, and Howe....they deduct everything!!!


:msp_rolleyes::msp_rolleyes::msp_rolleyes::msp_rolleyes:

 

[CountryBoy19]

Dont even think about trying that routine unless you set your company up as an LLC or a corporation.As far as the IRS is concerned, you and your business are one and the same.years ago I ran a small construction company,and was the sole proprieter.Sold myself the building materials to build my shop and got nailed in an audit two years later.Ended up writing a check to the IRS for $16000 plus some change for just that year alone.

Well no #### ... guess that was implied for all the people that get it... for those that don't... guess I have to spell out every detail.

#2, I'm confused what you're even trying to say about your construction company. Are you trying to say that your company sold you (you personally) materials at cost and the IRS nailed you on something? What did they nail you on, that would be a net income of zero no matter what way they look at it, you bought materials, you sold materials, you bought materials again, so that would be a net of "you bought materials". That wouldn't be any different than any other person buying materials. Or are you trying to say that the IRS claimed the sale of materials by your company counted as income but the purchase didn't count as an expense? If that's the case then thats BS, I've never heard of such lunacy, and you need a better tax lawyer. Or, did you try to cheat the system and claim the purchase of materials as a business expense and then not claim the sale of materials as gross income?

Either way, yes, you actually have to form an LLC or corporation to be able to do this.

 

[avalancher]

Well no #### ... guess that was implied for all the people that get it... for those that don't... guess I have to spell out every detail.

#2, I'm confused what you're even trying to say about your construction company. Are you trying to say that your company sold you (you personally) materials at cost and the IRS nailed you on something? What did they nail you on, that would be a net income of zero no matter what way they look at it, you bought materials, you sold materials, you bought materials again, so that would be a net of "you bought materials". That wouldn't be any different than any other person buying materials. Or are you trying to say that the IRS claimed the sale of materials by your company counted as income but the purchase didn't count as an expense? If that's the case then thats BS, I've never heard of such lunacy, and you need a better tax lawyer. Or, did you try to cheat the system and claim the purchase of materials as a business expense and then not claim the sale of materials as gross income?

Either way, yes, you actually have to form an LLC or corporation to be able to do this.

Well,if you want to be an ******* about it, then let me point out the total lunacy of starting a LLC or Incorporating a business just to have a tax write off for a few saws.
Namely,it costs money to set up a corporation,and most accountants advise not to incorporate unless you have either high risk business activities or have gross sales of 150K a year.I seriously doubt anyone around here push that kind of wood around for firewood.
When I finally went the LLC route, it costs almost $1300,which in most cases unless you seriously have a bad case of CAD, you arent going to offset the tax write off for a few saws and what not.

And as far as the selling material to yourself, you may get away with it in some cases, but in the case of a construction company, all materials have to be allocated to a job,and billed accordingly.If they arent, then they are considered inventory,and taxed as an asset to the business.Since I didnt charge myself for labor,which seemed not only retarded at the time, I also didnt charge myself the sales tax,which normally is added to the end of a project as a finished product. When the IRS noticed in the audit $5400 worth of building materials not accounted to any particular job, they wanted to know if I was stocking any inventory.Its actually against the law to sell anything tangible unless you have a retail license,including any excess inventory.Once the auditor noted the disrepency, I not only had to pay the back taxes on "Inventory" but also the state sales tax on the material that was sold tax free to me.Plus of coarse the penalties and interest that go along with any slap on the wrist from the tax man.

 

[Hedgerow]

The easiest way I can think to do it legitimately is to set up a separate company owned and operated by you, that sells firewood. Your saws are tax-deductible business expenses for that company. You (you personally) buy the wood from your company and add that expense to your home utility bills.

Of course that means you're going to have to file taxes for the company too then.

There may be other ways to legitimately do it, but you definitely want to talk to a CPA about that, not a bunch of guys on a chainsaw forum. That is why I let a CPA handle my taxes. For less than $80 a year I can have the peace of mind knowing that a CPA answered all my questions and worked every angle possible to get me the most money back, and it all should be legitimate.

You get a CPA for $80 a year? I shell out almost $300!!! :msp_confused: You might want to check their references... Or I might be getting hosed...:msp_mad:

 

[reaperman]

Tax time again. My wife and I own a small business, plus I work a normal (if there is such a thing) job. We just came back from the cpa a few days ago and he basically told us the same thing he did last year. And that is, the govt has the standard deduction rate so high that its getting tougher to itemize personal taxes than it use to be. Therefore, unless you can show legitimate expenses higher than the standard deductions, you may be ahead settling for that. Rather than spending money on useless items trying to raise your costs. Instead, save your $$$.

 

[Labman]

I think the greatest thing that ever happened to the income tax in my life time was Reagan cranking up the standard deduction to where it didn't pay for us to itemize, and indexing it to where it still doesn't pay.

You can still take business expenses as adjustments to income. Lowers your agi which helps other ways too.

All the expenses we incur raising puppies for service dog schools would be deductible. Now I would hate to discuss such items as pictures, chew toys, admission to places I only go because my puppy group is meeting there, hotel and convention expenses, millage for 100 mile drives to give talks, etc. with an IRS agent. Add in out of pocket expenses for church work, and I am sure our charitable deduction would be way out of line for our income. Oh, how about dividing dog food purchases between our puppy and our other dog? Could I deduct the safety harness we only use when we tak both dogs in the car? It is mostly nickel and dime stuff, but over a year it adds up. What about tonight when we drove over 50 miles to take the puppy to a fund raising dinner?

 

[beavis331]

Hope everything went good for ya dalmation. Best of luck!:msp_smile:

 

[beavis331]

You need a good accounting firm...feel free to use mine...Dewey, Cheatem, and Howe....they deduct everything!!!


:msp_rolleyes::msp_rolleyes::msp_rolleyes::msp_rolleyes:

They sound like a bunch of stooges.:msp_glare::msp_flapper:

 

[sunfish]

I'm self employed and heat my shop with wood. My tax lady said we're going
to deduct the new splitter and one chainsaw:msp_smile:

May need to buy another chainsaw this year!

 

[Patrick62]

I done it

For what it is worth I formed a LLC recently. I still have a lot of figuring out to do but this year we are going to be legit. Mostly. I just wonder how we are gonna depreciate the 44 year old truck.... :msp_ohmy: