Sunday, November 16, 2008

Can I claim my internet and/or electricity as tax expenses as a freelance writer


Can I claim my internet and/or electricity as tax expenses as a freelance writer?
I work from home reviewing computer-based video games for a living, and the articles are published online. I spend maybe 6 hours a day working on articles, so it goes without saying that without internet (or electricity) I could not do my job. Can I claim these things as expenses? And would I have to file form 8829 if I did, or could I just add them to my Schedule C?
United States - 4 Answers
Random Answers, Critics, Comments, Opinions :
1 :
Of course they are how you make your living. Without them you could not earn an income.
2 :
Electricity is very minimal. Maybe 5 cents a day. To write that off, you need records showing how much is used. If you use your Internet connection for anything OTHER than strictly business, you cannot write anything off.
3 :
For a home office, all off your home expenses are tax-deductible based on the business percentage of your home. That includes your mortgage payment, utilities, insurance, real estate taxes, garbage, water, etc. To figure out the percentage of your home that’s used for business, divide the square footage of the area used for business by the square footage of your entire home. For example, if your home office is 12 feet by 12 feet, that’s 144 square feet. If your entire home is 1,400 square feet, then diving 144 by 1,400 gives you a home office space that’s 10% of your home. Therefore 10% of the qualifying expenses of your home can be attributed to business use and the remaining 90% are personal use. So if your monthly power bill is $200 and 10% of your home qualifies for business use, you can consider $20 of the bill a business expense and the remaining $180 a personal expense. For more details see IRS Publication 587, titled Business Use of Your Home. If you’re self-employed you must generally report expenses for business use of your home on IRS Form 8829. Here's more information: http://moneygirl.quickanddirtytips.com/home-office-deductions.aspx
4 :
Do you have a separate space that you work from that you NEVER use for anything personal? If not, then no to the electricity. Do you ever use your internet connection for non work stuff? If yes, then you cannot claim the internet as an expense. Claim anything like this and you can expect to be audited because so many people, like you, push the envelope into tax evasion.


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Posted by Freelance Job at 11:26 AM