Q: I have a small Web design business. How do I write off supplies (especially computers, software and electricity) for the business knowing that I also run my home items on the same computer? What percentage can I write off?
A: At some point nearly everyone running a home-based business asks the same question - how do I mark where work ends and life begins, and what does that mean come tax time?
“There’s two ways to look at it,” says Grafton “Cap” Willey, past chair of the National Small Business Association and a senior partner with Tofias PC, a New England accounting and professional services firm. “There’s the technically correct way, and the practical way.”
The technically correct way is for you to log exactly the time spent using the computer - and whatever other equipment you use - for business and for pleasure.
But if the thought of whipping out a pencil every time you surf over to check out the latest on Hockeyfights.com between now and retirement has you running back to 9-to-5-land, don’t worry. Your record doesn’t have to be that exact.
“The reality is most small businesses can’t be that detailed or focused, so the IRS takes a more reasonable approach,” Willey says - though it’s always possible that an IRS auditor in a cranky mood could decide to quibble.
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Photo by svilen001.
Write-Offs For Your Home Biz
March 12, 2008 by Rich | 0 Comments
In Self-employed, Taxes, Work at Home
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