Writing off TVs and home offices - split from TV thread

[Tex Arcana]

I just need to find a piece of furniture to hold it that has a swivel so I can point it to my desk in the next room

Screw that: put yer desk behind the couch like a sofa table, hook the computer up to the TV, and write the TV off as a computer monitor, used for doing business. :d

[Silver_2000]

Screw that: put yer desk behind the couch like a sofa table, hook the computer up to the TV, and write the TV off as a computer monitor, used for doing business. :d

Behind the couch is already full of exercise equipment

[Tex Arcana]

Behind the couch is already full of exercise equipment

Then move it. :tongue: Turn that bigscreen into a write-off!

[Silver_2000]

Then move it. :tongue: Turn that bigscreen into a write-off!
How would that work - I dont claim my office now - its not worth the red flag for the $300 it would save

[Tex Arcana]

How would that work - I dont claim my office now - its not worth the red flag for the $300 it would save

Then you're killing yourself because you're not claiing all you should be claiming.

Think: you operate your own business, outside your main work. You spend a significant amount of time operating it. Your home office space (as defined by the amount of time you spend doing said work in said space) is a tax deduction by itself, including a percentage of your mortgage payments and your utilities. Your internet connection, when used for business, becomes a writeoff. Television thru the connection as well, especially when you use said connection to watch news, financial news, tech news, and educational shows (say, a show thta shows you how to write off business expenses, or one that shows you a new way to hook up a computer to the internet, etc, etc). Now run your computer's output to the big screen/plasma/DLP/LCD TV: now it's a monitor, and now used in your business; and now a tax writeoff.

See? :tu:

[Silver_2000]

Then you're killing yourself because you're not claiing all you should be claiming.

Think: you operate your own business, outside your main work. You spend a significant amount of time operating it. Your home office space (as defined by the amount of time you spend doing said work in said space) is a tax deduction by itself, including a percentage of your mortgage payments and your utilities. Your internet connection, when used for business, becomes a writeoff. Television thru the connection as well, especially when you use said connection to watch news, financial news, tech news, and educational shows (say, a show thta shows you how to write off business expenses, or one that shows you a new way to hook up a computer to the internet, etc, etc). Now run your computer's output to the big screen/plasma/DLP/LCD TV: now it's a monitor, and now used in your business; and now a tax writeoff.

See? :tu:
The word EXCLUSIVE USE would cause a problem

Doug

dont let the facts get in the way ...

http://www.kiplinger.com/columns/ask/archive/2004/q0130.htm

You can write off your home-office expenses if you qualify for the deduction:

You must use an area of your home regularly and exclusively for business.
The area must also be the principal location of your business or the place where you usually meet with clients.

Tax Write-Off: Home Office
Home office deductions used to be a big red flag for an audit back in the 1990s. These days, you just need to use the deduction with caution. A basic rule of thumb to follow? "Anything that's unusual and disproportionate to your level of income is something the IRS will check out," Alvin Brown says.
So how do you determine your actual home office space? This is the area in your home dedicated solely to the running of your business. Once you figure out the percentage of your home office compared to your overall home, then you can go back to your heating bills, electric bills and all other bills that go to supporting your home, and figure out the amount you can deduct for running your business.

Expert Opinion: "Don't measure your home office space yourself. When you do, you almost always shortchange yourself," says Ennico.
How to Do It Right: It's a good idea to have a contractor measure your space professionally. They can provide you with a letter stating the exact square footage of your home office space should you need to substantiate it with the IRS.Tax Write-Off: Home Office Computer
As our experts pointed out before, it's not a good idea to mix your business world with your personal life. So they recommend never using your home office computer (http://www.entrepreneur.com/money/taxcenter/article171204.html#) for personal tasks if you can help it.

Expert Opinion: "If this is the only computer in your house, you'll have to calculate the percentage of total time you use it for business purposes," suggests Ennico.
How to Do It Right: Ideally, your best option is to purchase a laptop and dedicate it to being your personal computer. This way you can avoid any messy situations come audit time.Tax Write-Off: Rent
Wondering if you can still take the home office deduction if you're a renter? The answer is yes. But you need to know the right way to go about it.

Expert Opinion: "If your landlord is an individual or unincorporated business, such as a partnership or LLC," says Ennico, "you may have to send IRS Form 1099 to your landlord in January of each year showing how much of your rent you're deducting."
How to Do It Right: To ensure that you handle this deduction appropriately, it's a good idea to check with your accountant for details.

[dboat]

I forget how long ago it is now.. but IIRC, deductions for home businesses are one of the most frequently audited items in a return.. its a high flyer to the IRS...

Dana

[Silver_2000]

I forget how long ago it is now.. but IIRC, deductions for home businesses are one of the most frequently audited items in a return.. its a high flyer to the IRS...

Dana

Yep

Here is the IRS document specific to TAX GAP - meaning the TAX that is NOT paid due to inappropriate deductions

http://www.irs.gov/newsroom/article/0,,id=163079,00.html

It starts with

Home Office Deduction Reminders

FS-2006-25, September 2006
WASHINGTON— Overstated adjustments, deductions, exemptions and credits account for up to $30 billion per year in unpaid taxes, according to IRS estimates.
In order to educate taxpayers regarding their filing obligations, this fact sheet, the fourth in a series, explains the rules for deducting home office expenses.

SNIP

In order to claim a deduction for that part of a home used for business, taxpayers must use that part of the home:
Exclusively and regularly as their principal place of business, as a place to meet or deal with patients, clients or customers in the normal course of their business, or in connection with their trade or business where there is a separate structure not attached to the home;

snip

“Exclusive use” means a specific area of the home is used only for trade or business. “Regular use” means the area is used regularly for trade or business. Incidental or occasional business use is not regular use.
Non-business profit-seeking endeavors such as investment activities do not qualify for a home office deduction, nor do not-for-profit activities such as hobbies.
Example: An attorney uses the den in his home to write legal briefs or prepare clients’ tax returns. The family also uses the den for recreation. The den is not used exclusively in the attorney’s profession, so a business deduction cannot be claimed for its use.

[WA 2 FST]

I agree with Doug and Dana. I use my home for my office, and have a legitimate "office" in my home... and I don't claim it as a deduction. It's a small room, and the savings is definitely not worth being "flagged". Plus, its not 100% exclusive. I have a PS2 in here, and I'm typing this message from my office computer.

Trust me, I take every deduction worth taking. I have to. This isn't one of them, and the excerpts that Doug cites are very good.

[Tex Arcana]

Thank you for the clarifications, Doug, they are very enlightening.


My neighbor up the street ran T1 to his house, and is doing exactly what I suggested to Doug: big-screen TV/monitor, the T1, portion of the house, etc.; however, he's single, lives alone, and runs an Internet advertising/online casino webmastering business out of his home, so I'm sure he can get away with that. ;)

My CPA does the deductions for the home office for Monica's business right now, and as soon as I'm spooled up, I'll be doing the same. Then again, this is the guy that's netted me about $12k in tax refunds in the last couple years, thanks to an apparently little-known rule about applying losses against taxes paid in the prior two years before the loss. :cool: I REALLY like my cpa!

And, yes, I'll be discussing the home-office thing with him again, as well as whatever deductions we can do legally, incuding the vehicle.

[WA 2 FST]

Yep. I have written off both my Lightnings ('99 and '04). The '99 had to be depreciated over 5 years, but the '04 was a "year 1" deduction for the entire price of the truck thanks to the tax laws of the past couple of years.

I would never suggest not taking a legitimate _worthwhile_ tax deduction. I just think audits stink and there are some things not worth causing a stir over. Home mortgage interest is written off anyway. My office supplies/furniture are written off. My fax is written off, etc. The small office space in my case (~12x12) and what it would give me is a miniscule amount...and for me, it is not "exclusively office space". My kids watch TV in here every now and then, for example.

The "little known rule" about applying losses to previously paid taxes is common sense to me... but then again, that's what two 3-hour courses in tax accounting will do for me, I guess. It's good you have someone looking out for you and saving you some hard earned $$. Wouldn't want all those "tax and spend" liberals taking all your money now, would we. ;)

[Tex Arcana]

Yep. I have written off both my Lightnings ('99 and '04). The '99 had to be depreciated over 5 years, but the '04 was a "year 1" deduction for the entire price of the truck thanks to the tax laws of the past couple of years.

I would never suggest not taking a legitimate _worthwhile_ tax deduction. I just think audits stink and there are some things not worth causing a stir over. Home mortgage interest is written off anyway. My office supplies/furniture are written off. My fax is written off, etc. The small office space in my case (~12x12) and what it would give me is a miniscule amount...and for me, it is not "exclusively office space". My kids watch TV in here every now and then, for example.

The "little known rule" about applying losses to previously paid taxes is common sense to me... but then again, that's what two 3-hour courses in tax accounting will do for me, I guess. It's good you have someone looking out for you and saving you some hard earned $$. Wouldn't want all those "tax and spend" liberals taking all your money now, would we. ;)

:rll::hammer: :tongue:

We have some friends who ran afoul of the IRS in an audit, got nailed to the tune of $12k, and got on a payment plan; last week, the IRS goofed up, and garnished his paycheck to the tune of about 90% of it; atop of that, they jacked the total owed to over $17k. :hammer:

Their error in the first place ws not getting a tax attorney to represent them; they are getting one now, esp. after the IRS phone reps were rude and uncompromising. :flaming: