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View Full Version : Write offs what and how much can you write off?


shoctor
10-26-2008, 09:20 PM
What is everyone else writing off for their business aside from fuel, mileage, equipment, equipment maintenance and advertising? Just shecking to make sure the accountant is not missing anything. :hammerhead:

IN2MOWN
10-26-2008, 09:28 PM
Anything that has to do with your business and I mean ANYTHING.


Do you run it out of your house? Figure out how much space you use for your business and write that off. Part of your utilities also.

Spend money on food or drinks?

Clothing or uniforms?

Postage?

The list is miles long.

landscaper22
10-26-2008, 09:47 PM
Yeah, if you operate out of your home you can write off a portion of your electric, phone bill, etc. And like in2mown said, anything you purchase that is used for business, write it off. A CPA would be able to help more than we can though. They can give you a lot of advice.

Superior L & L
10-26-2008, 10:00 PM
You do have to be careful about your house . You can write off a percentage of your payment based on percentage of square footage used. But if/when you sell your house and you make money the gains also have to be divided by that percentage and reported by your company

old oak lawn
10-27-2008, 12:33 AM
You do have to be careful about your house . You can write off a percentage of your payment based on percentage of square footage used. But if/when you sell your house and you make money the gains also have to be divided by that percentage and reported by your company

this is what my CPA told me also. he said it would not be worth it for me to do so. //For me.// Keep track of everything you spend on your business, all those little thing add up.

shoctor
10-27-2008, 02:07 PM
does anyone have a spreadsheet from their CPA etc etc that they currently use for tax deductions that has the specific itemizations for tax deductions? I would be interested in seeing this. If not maybe as a collective on the board if everyone sent me their list of deductions aside from the obvious deductions and put a list together for anyone that would like a copy.

LawnTamer
10-27-2008, 02:17 PM
I will only give 2 pieces of advice.

1. Get and use a GOOD accountant, at least for a year or two, that will allow you to see how he/she plugs numbers in, and uses tax shelters. Everyone has lots of advice, about half of it is right, a good accountant is a must, and most of them are not very good.

2. Write off whatever you think reasonable, but never, and I mean never hide income, never have clients write checks straight to your personal account, if you accept cash, declare it etc. If you are audited and the IRS/State tax dept disagrees with a write off, they will make you pay the difference, in many cases, they won't even hit you with any penalties, or will wave the penalties. If they find that you have hid, or tried to hide income, you get to go to prison, where you can be some 300lb felon's "girlfriend".:nono: I have had 4 different accountants and every one of them gave me that same advice.

Exact Rototilling
10-28-2008, 11:58 PM
Lawn Tamer has great advice and I need to get an accountant myself. :hammerhead:

Becarefull about the IRS definition re: home office deduction. My Lawn biz really doesn't qualify for it but my other home business clearly does. This is a favorite audit area.

I just can't claim 2 home offices :D

brandtb1
10-29-2008, 10:58 AM
I write off anything that is a business expense. I do not write off anything on my house, because I heard that is a trigger for an audit. The little stuff that you purchase adds up. I have a company debit card and use that for business purchases only. I also save the receipts in a file. If you use it in the business, you should be able to write it off.

ECS
10-29-2008, 11:50 AM
does anyone have a spreadsheet from their CPA etc etc that they currently use for tax deductions that has the specific itemizations for tax deductions? I would be interested in seeing this. If not maybe as a collective on the board if everyone sent me their list of deductions aside from the obvious deductions and put a list together for anyone that would like a copy.

There are 2 excel sheets that I use. The $ amount for the fuel allowance would need to be changed on all sheets to reflect the currant allowance.

One sheet is for vehicle use, both for work and personal use and gets transposed onto the expense report for me. Anything I am in question about, I type in on the bottom of the montly expense sheet and on the bottom of the total sheet and let my accountant decide to use it or not. I type in the date, the category it was placed in and the dollar amount.

Feel free to use them if you want. My accountant loves these sheets. I can not upload the excel sheets on here, but I can email them to you if you want.

grasswhacker
10-29-2008, 11:54 AM
Anything that has to do with your business and I mean ANYTHING.


Do you run it out of your house? Figure out how much space you use for your business and write that off. Part of your utilities also.

Spend money on food or drinks?

Clothing or uniforms?

Postage?

The list is miles long.

You cannot write off your house expenses unless your clients come to your house to conduct business. Just because you do your bookwork at home does not make it allowable to take the home office deduction. A great red flag for the IRS.

HOOLIE
10-29-2008, 12:04 PM
2. Write off whatever you think reasonable, but never, and I mean never hide income, never have clients write checks straight to your personal account, if you accept cash, declare it etc. If you are audited and the IRS/State tax dept disagrees with a write off, they will make you pay the difference, in many cases, they won't even hit you with any penalties, or will wave the penalties. If they find that you have hid, or tried to hide income, you get to go to prison, where you can be some 300lb felon's "girlfriend".:nono: I have had 4 different accountants and every one of them gave me that same advice.

This is technically true, but one of those things that gets overblown on Lawnsite. I'm not at all advocating hiding income, but the feds don't go after guys that 'forget' to report $5000 in income. They go after the most blatant violaters, people that don't report hundreds of thousands of dollars or more. Tax evasion is not actually easy to prove since they must show the 'intent' of the person to hide the money, and let's be real, you forget to show a few grand, that's considered more of an oversight than anything else. Again, not saying to not report income, I just get a laugh when people freak out over some guy pocketing cash for a one time cut and half the posters say the IRS will get him.

grasswhacker
10-29-2008, 12:09 PM
This is technically true, but one of those things that gets overblown on Lawnsite. I'm not at all advocating hiding income, but the feds don't go after guys that 'forget' to report $5000 in income. They go after the most blatant violaters, people that don't report hundreds of thousands of dollars or more. Tax evasion is not actually easy to prove since they must show the 'intent' of the person to hide the money, and let's be real, you forget to show a few grand, that's considered more of an oversight than anything else. Again, not saying to not report income, I just get a laugh when people freak out over some guy pocketing cash for a one time cut and half the posters say the IRS will get him.

if someone under reports over 20% they open themselves up to fraud and can have all of their tax years audited with no limit as to the number of years the IRS can go back.

TLS
10-29-2008, 12:33 PM
You cannot write off your house expenses unless your clients come to your house to conduct business. Just because you do your bookwork at home does not make it allowable to take the home office deduction. A great red flag for the IRS.

This was never explained to me this way. Can anyone verify that this is true? I was always under the impression that a home office is a home office. Just be sure it doesn't have a bed in it. It was never stipulated that you must have visiting customers.

If you weren't able to do your paperwork at home, you'd have to rent an office to do so. Therefore it must be able to be deducted.

SSmith
10-29-2008, 12:36 PM
This was never explained to me this way. Can anyone verify that this is true? I was always under the impression that a home office is a home office. Just be sure it doesn't have a bed in it. It was never stipulated that you must have visiting customers.

If you weren't able to do your paperwork at home, you'd have to rent an office to do so. Therefore it must be able to be deducted.

Correct.

Example - 1500 sq ft home. Your office is 300 sq ft. You can write off 1/5th of all utilities, etc, etc.

It's a piece of cake. Just save your receipts and statements (this is actually the hard part).

IN2MOWN
10-29-2008, 07:42 PM
You cannot write off your house expenses unless your clients come to your house to conduct business. Just because you do your bookwork at home does not make it allowable to take the home office deduction. A great red flag for the IRS.



You can write off a certain portion of them and thats why I said "part" of your utilities.

My electrical and plumbing also go into my garage where I keep my equipment. I can write a portion of them off since I use them for work.

Not a red flag at all.

grasswhacker
10-29-2008, 10:12 PM
You can write off a certain portion of them and thats why I said "part" of your utilities.

My electrical and plumbing also go into my garage where I keep my equipment. I can write a portion of them off since I use them for work.

Not a red flag at all.

IRS Tax Tip 2008-53

If you use a portion of your home for business purposes, you may be able to take a home office deduction whether you are self-employed or an employee. Expenses that you may be able to deduct for business use of the home may include the business portion of real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, painting and repairs.

You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively:

* As your principal place of business for any trade or business
* As a place to meet or deal with your patients, clients or customers in the normal course of your trade or business

IN2MOWN
10-29-2008, 10:22 PM
IRS Tax Tip 2008-53

If you use a portion of your home for business purposes, you may be able to take a home office deduction whether you are self-employed or an employee. Expenses that you may be able to deduct for business use of the home may include the business portion of real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, painting and repairs.

You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively:

* As your principal place of business for any trade or business
* As a place to meet or deal with your patients, clients or customers in the normal course of your trade or business




Thank you. Im right.

Read it again.

Meet OR deal with customers.

My home office and detached garage is the principal place of my business. My headquarters so to speak. It is also the place I deal with my customers in the normal course of business. As with any business though I have to go out into the field to deal with work.

Its all in how your interpert things.

grasswhacker
10-29-2008, 10:56 PM
Thank you. Im right.

Read it again.

Meet OR deal with customers.

My home office and detached garage is the principal place of my business. My headquarters so to speak. It is also the place I deal with my customers in the normal course of business. As with any business though I have to go out into the field to deal with work.

Its all in how your interpert things.

I meet, deal and perform my services on the customers site not my home.
And it's the IRS that is the final interpreter not either one of us.
So do that which you are persuaded in your mind.

IN2MOWN
10-29-2008, 11:48 PM
I meet, deal and perform my services on the customers site not my home.
And it's the IRS that is the final interpreter not either one of us.
So do that which you are persuaded in your mind.




I dont know about you but I have a phone and email that I have met people on and dealt with people on and that phone and computer are at my desk in my office on the first floor of my house.

mngrassguy
10-30-2008, 02:36 AM
Just because it's a legal deduction doesn't mean it won't show a red flag causing an audit.

Also, I don't think food, drinks or lodging are deductible. I know a guy who claims meals as "safety meetings" in order to get around that but I would NEVER do that. LOL

grasswhacker
10-30-2008, 06:26 AM
I dont know about you but I have a phone and email that I have met people on and dealt with people on and that phone and computer are at my desk in my office on the first floor of my house.

Well if you ever get an IRS field audit I hope everything goes as planned. They'll want to see your place of business, and if your lifestyle reflects more than your income, be prepared to do a lot of splainin':)

IN2MOWN
10-30-2008, 08:21 AM
Just because it's a legal deduction doesn't mean it won't show a red flag causing an audit.

Also, I don't think food, drinks or lodging are deductible. I know a guy who claims meals as "safety meetings" in order to get around that but I would NEVER do that. LOL



So you dont claim the 5 gallon water jug you bought for the summer and the powdered Gatorade mix you put it in for your employees?

If you just went to the GIE expo that is a work related trip and you could deduct everything from the meals to the travel expenses.

You guys are really missing out on a lot of things here. Either you dont have CPA's or they are just giving you bad advice.

IN2MOWN
10-30-2008, 08:23 AM
Well if you ever get an IRS field audit I hope everything goes as planned. They'll want to see your place of business, and if your lifestyle reflects more than your income, be prepared to do a lot of splainin':)


I would suggest doing some more research or getting a competent CPA. :waving:

grasswhacker
10-30-2008, 08:41 AM
I would suggest doing some more research or getting a competent CPA. :waving:

Whatever works for you.

IN2MOWN
10-30-2008, 08:47 AM
Whatever works for you.

Thank you but to be honest I dont need your permission or holier then thou attitude.

I follow the IRS laws as do most people on this site. After 15 years of being involved in a small business Im pretty sure know what the deductions are and they happen to be anything that is work related.

There is a reason that the laws are in place and its to help small business owners. I take advantage of those laws and rules and use them to my benefit. If a person does not then they are a fool.

grasswhacker
10-30-2008, 09:52 AM
Thank you but to be honest I dont need your permission or holier then thou attitude.

I follow the IRS laws as do most people on this site. After 15 years of being involved in a small business Im pretty sure know what the deductions are and they happen to be anything that is work related.

There is a reason that the laws are in place and its to help small business owners. I take advantage of those laws and rules and use them to my benefit. If a person does not then they are a fool.

Feel better now?:)

TLS
10-30-2008, 09:58 AM
You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively:

* As your principal place of business for any trade or business
* As a place to meet or deal with your patients, clients or customers in the normal course of your trade or business


This is exactly the reason us guys DO deduct the home office. The EXCLUSIVELY part is very important. You cant be using the office for a bedroom or living room, etc.

As our principal place of business for ANY trade or business. How can this be any more clear for us? ANY is all and we all operate as either a trade or business.

Yes, it's a common flag area, but it's a pretty nice deduction for those of us who have a free room to use as a dedicated office.

IN2MOWN
10-30-2008, 03:03 PM
Feel better now?:)



Not quite and Im sorry to snap at you.

I dont understand why you think you cant write off things like that. Its plain as day in what YOU posted.

Jeff Tracey Enterprises
11-03-2008, 07:39 PM
GOLF!!!! I write off every round of golf I play!!! It goes under the entertainment section. I write it off whether its with a client or with my dad ( who also owns a business, and I cut his grass for him.) All you have to do is talk business with them and its technically a meeting. If you are loading your clubs in the cart and say you want me to mow for you and they say nope, still a meeting and still a write off!