[quote=AN][quote=SK in CV]If they use a home office exclusively for work and there is no other local office, then there might be a small deduction. If they use their cars for business, they can write off a piece of the cost, exactly like you can. They can write off their cell phones if they use it for work and it’s a 2nd cell phone (can’t write off 1st cell phones). Bottom line is, they can legally write off costs that are related to the business. Not unrelated costs that improve lifestyle outside of work.[/quote]W2 earner can’t write off any of that. I have a home office that I use for work. Can’t write that off. I have a car that I use to take myself to work and back. Can’t write that off. Biz owner can have the company pay for the car and maintain the car, so it’s not a piece of the cost, it’s the entire cost + maintenance. Biz owner can have their company own the cellphone contract. I don’t know about you but having your computer, cellphone, car, etc. paid for does improve their life style. Especially if it allow you to have extra money to spend on other stuff.
Let me put it another way. Lets say a W2 earner and a biz owner both making $200k (based on their taxable income). The W2 earner would have to pay for the stuff I listed and more with their after tax income. The biz owner can have a lot of those stuff paid for through their biz. So the $200k can be use purely for their enjoyment to enhance their life style.
BTW, I thought you said it’s fantasy and does not exist?[/quote]
The kind of tax write offs you’re talking about are potentially fraudulent. I know for a fact the rules on home offices are pretty strict if you want to follow the tax code to the letter. If not… well, then just make up a number you think is fair to pay the government and hope you don’t get audited.
