Audio tax write-off

abnerjack ...

I fully understand why you ended up hating tax law.

The U.S. tax code consists of over 70,000 pages and contains over nine million words. It is in constant flux. Five different CPAs can come up with five different answers to the same question. Even the IRS is not liable for any advice they give the taxpayer.

My conclusion was always ... If I buy it for business, use it solely for business, then it is a business write-off. Admittedly, I did take advantage of every opportunity available to me in the tax code, which I believed to be my patriotic duty.

I was audited one time. The auditor was a very nice man whose name was "Theodore."

After going through everything on my tax return, "Theodore" nailed me for my cell phone expenses. I had written off 90% of my phone use as a business expense on my Schedule "C" form. I freely admitted to "Theodore" that 90% was an estimate, but an accurate one.

"Theodore" was kind enough to point out that I had failed to keep an IRS required phone log of every call I had made. He said that if I wanted to write off cell phone expenses, I am expected to keep track of each call ... from the time the client answers the call to the time the call is completed, with dates, times, names of the clients, etc.

"Theodore" allowed 10% of the phone expenses, and gave me a bill for the rest, which I paid right away.

Hear this ... Ceasar insists that all financial confessions are to be in minute detail, so don’t mess it up. Quite frankly, I think a prudent question would be ... why do Americans continue to put up with this?

Disclosure: I’ve been retired for a few years now and no longer run a business. So, don’t take any advice from me. Chances are, there’s been a multitude of changes made since then.

Frank

I am an s-Corp with a home office. I write off all my electronics. My accountant thinks I don’t take nearly enough deductions. He’s  very aggressive, I’m cautious. It depends how you’re set up. 

There’s a lot of if’s involved with the whole home office and taxes.  You can deduct part of your rent, utilities if you have a dedicated office , a room used for nothing else.  Example, I have a six room house and I use a bedroom for nothing but my work, I can deduct 1/6th of the cost of your home bills.  As far as headphones or computers, you can deduct or amortize the full value, but you have to have receipts and have a good story about how they are used for nothing else. As far as cellphones,  your provider keeps track of every call and text. Verizon has it as a downloadable PDF.  IRS Form 2106 is what you want to check out.

All the best

JD

I used to write off some of the equipment when I was an active musician...now, I just pay.

I do it, "studio equipment" expense, which is not a lie actually. Don't use the word "vintage" or "used" anywhere though as that won't pass in an audit. It has to be new kit to be valid in eyes of the man.