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9 votes
Accepted

In the U.S., can I deduct coffee as an expense if I am a self-employed software developer?

Can i write this off as a tax deduction? No. You're buying coffee. The coffee costs the same whether you use WiFi or not, therefore the WiFi has no attributable business cost. If you were buying ...
Hart CO's user avatar
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8 votes
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What accounting entries should I make for writing off a personal loan?

You'd debit "Bad Debt Expense" or comparably named expense account. Edit: I like glglgl's idea of the same account as gifts to keep number of accounts low, it's really just a matter of ...
Hart CO's user avatar
  • 70.5k
7 votes
Accepted

Tax write-off for donating a mural

The term "write off" refers to when you take money that the IRS would otherwise consider income, and tell them that it wasn't income. If there is no money, there is no write-off. If you buy ...
Acccumulation's user avatar
7 votes
Accepted

Write off personally owned computer parts used in company owned computers?

The condition, if any, is that these expenses are deductible to the extent they exceed 2% of your adjusted gross income. Then it flows to Schedule A, where if all your deductions don't exceed the ...
JTP - Apologise to Monica's user avatar
5 votes

How can I argue for a higher motorcycle write-off value?

Insurer's view I feel that it's entirely unfair to look at ads now that the season is over. Nobody wants to buy a bike in winter just to store it in the garage for several months, so prices will ...
Brythan's user avatar
  • 21k
5 votes

What accounting entries should I make for writing off a personal loan?

You use the same expense account you would use for a gift.
glglgl's user avatar
  • 5,415
4 votes

Understanding diminishing returns for write-offs

Deductions to your taxable income reduce your tax owed at your marginal tax rate. So yes, a deduction with a 50k taxable income (after all other deductions) reduces your tax more than a deduction with ...
D Stanley's user avatar
  • 136k
4 votes
Accepted

Can I write off investment losses into future years?

According to this page on the IRS site capital losses must first be used to offset any capital gains. Any excess losses can be deducted against ordinary income up to $3,000 ($1,500 if married filing ...
not-nick's user avatar
  • 6,418
3 votes

Should I form a General Partnership? [US-CA]

General partnership is your default structure. You might want to formalize it with a properly written operating agreement, but when you start a sentence with "my friend and I" - you're ...
littleadv's user avatar
  • 176k
3 votes
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How do I write off an invoice in GnuCash?

I found the steps in the gnucash mailing list that worked well for me. New Invoice from the menu Select credit note as the type of invoice Fill out the invoice the same way as the original invoice ...
Interlated's user avatar
2 votes
Accepted

USA - Can I write off time spent using this metric

If you pay yourself, that money would be taxable income to you, then the LLC has an equal off-setting expense, so there would be zero net impact if you pay yourself in a pass-through entity (single-...
Hart CO's user avatar
  • 70.5k
2 votes

USA - Why can't I write off my IRA contribution for 2017?

Your Roth IRA contribution does not generate an immediate deduction (the earnings are tax favored instead). Your Simple IRA contribution was likey taken out as pre-tax dollars, thus you get no ...
Bryce's user avatar
  • 2,550
2 votes
Accepted

In this scenario can I write off more than $25 for a gift?

As @BobbyScon said, this is an accounting gray area. Here's my personal experience with similar situations: I've had a few clients get random audited in the past. Unless the auditors are specifically ...
acousticismX's user avatar
2 votes

Can I write off investment losses into future years?

As Nick replied, producing $1M in capital gains would solve the issue. 2 other thoughts - Find, and marry, someone with a short term gain of $1M. That would let you use the loss in one year. Buy a ...
JTP - Apologise to Monica's user avatar
2 votes
Accepted

Company Mortgage - Can I write off Principal as a Business Expense?

A capital outlay is money a company spends to either purchase a fixed asset or to extend its useful life. Fixed assets are those that appear on the balance sheet as property, plant and equipment, ...
Acccumulation's user avatar
2 votes

Company Mortgage - Can I write off Principal as a Business Expense?

In general repayment of a loan does not count as an expense for tax purposes. This is because you have not "spent" money in an accounting sense. Instead you have reduced your cash assets by ...
DJClayworth's user avatar
  • 33.4k
2 votes
Accepted

Actual Expense method vs mileage method self-employed

Also how would I prove to the IRS that I'm being truthful for both methods? The key to claiming anything on your tax form is documentation. If you have a receipt you have to keep it. So when you buy ...
mhoran_psprep's user avatar
2 votes

Can items bought second hand be a tax write off? How does buying from an individual instead of a business work?

Yes, in the US, this is a business expense. Look into taking a Section 179 deduction, this will likely qualify. A written receipt is fine. It is very unlikely this would be audited, and you have the ...
Rocky's user avatar
  • 24k
2 votes
Accepted

Can items bought second hand be a tax write off? How does buying from an individual instead of a business work?

I would ask the seller for a receipt. If the seller won't do that you could use your emails with the seller and the screenshot to document the purchase. I don't know what the IRS would consider to ...
minou's user avatar
  • 7,536
2 votes

Personal versus business mileage question

You are travelling from A to B for business. It is unreasonable to expect you to do so without gas. Therefore, a slightly longer route that includes a gas station is a reasonable route from A to B, ...
Rupert Morrish's user avatar
2 votes

Personal versus business mileage question

I use google maps and other similar tools to calculate the distance from location A to location B. That is what I charge. That is the miles I had to drive that are business related. Now if the ...
mhoran_psprep's user avatar
2 votes

Why is CAPEX better than OPEX?

Frame challenge: between CapEx and OpEx, neither is intrinsically 'better' than the other. They are just different categories of expenditure. CapEx is any type of expense that a company capitalizes, ...
Lawrence's user avatar
  • 9,362
2 votes

Create LLC to invest and make big purchases?

If you have a business, and the business has expenses, those are business expenses whether you're a sole proprietor or LLC or Corp or whatever. If you're a W2 employee you can't deduct expenses ...
quid's user avatar
  • 49k
1 vote

Understanding diminishing returns for write-offs

In general a deduction is only good if you are itemizing, unless it is a deduction that you are allowed to take even if you take the standard deduction. Items that fall into this category are a $250 ...
mhoran_psprep's user avatar
1 vote

Understanding diminishing returns for write-offs

Even if you DO have taxable income, a Write-off (Deduction type) may not even help you unless your total deductions exceed the Standard deduction. If $1000 was the total amount of itemized deductions ...
JohnFx's user avatar
  • 53k
1 vote

If corporations can claim loss of $600 million and a person can claim loss of only $3000 per year, then what if we operate as Corp2Corp or 1099?

These are two separate categories of tax compliance, and there are many many categories of tax compliance. The article is referring to Net Operating Losses which is because it spends more than it ...
CQM's user avatar
  • 20.2k
1 vote

Why is CAPEX better than OPEX?

It's not high assets and high liabilities vs low assets and low liabilities. It's high assets vs low assets, liabilities are completely unrelated. And of course, for tax reasons it might make sense ...
juhist's user avatar
  • 6,743
1 vote

Tax Write-offs and knowing how much I need to spend before the end of the year

(I'm assuming USA tax code as this is untagged) As the comments above suggest there is no "right" answer or easy formula. The main issue is that you likely got into business to make money and if you ...
rhaskett's user avatar
  • 6,608

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