Write-offs - Contractor Talk - Professional Construction and Remodeling Forum

Flawless Finish · 10-14-2006, 09:00 PM

What are some of the things painters write-off that aren't obvious?

According to the IRS:
"To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary."

Debookkeeper · 10-14-2006, 09:03 PM

Did you have any ideas??

lmcgrew79 · 10-14-2006, 09:37 PM

Other then the obvious, "you cant cheat taxes or death"

Richard · 10-14-2006, 10:05 PM

I've heard of some guys getting away with buying lunch!...But for me, I keep track of/keep receipts for ALL. Some one's you might miss~cell phone bill, home phone bill, clothes, printer paper/ink, truck/van repairs, etc.....anything and everything is deductible as long as(like you said) it's bus. related....

mahlere · 10-14-2006, 10:29 PM

lunch, within reason, is deductable. T&E is a legitimate column on your 'write off' list. depends on the circumstances and who is there.

just remember, a tax 'write off' doesn't mean you don't have to pay the bill, it just means there are no additional taxes paid on that money.

Debookkeeper · 10-14-2006, 11:01 PM

Yes - you can take "clients" out to lunch to discuss business.

mahlere · 10-14-2006, 11:06 PM

and just because my clients tend to be named bambi or sparkles and we happen to be discussing remodeling their club, which just happens to be for gentlemen, doesn't make it wrong. so leave me alone, ok

Tscarborough · 10-14-2006, 11:10 PM

A write-off is not the same as an expense or deduction. A write-off is money owed that is not paid or damaged goods, for example, while an expense/deduction is a standard cost of doing business (client lunches, training expense, etc).

Each has its own rules, and if you are in doubt, an accountant is your best bet.

reveivl · 10-14-2006, 11:46 PM

I send ALL receipts to god (accountant) and let him figure it out. Don't forget power bill (home office %), water, phone, municipal taxes, whatever.

Dustball · 10-15-2006, 09:55 AM

My Dish network bill to get the DIY channel so I can stay up to date on the latest techniques and information relating to the remodeling world.

steve-in-kville · 10-15-2006, 11:57 AM

Quote:

Originally Posted by Dustball

My Dish network bill to get the DIY channel so I can stay up to date on the latest techniques and information relating to the remodeling world.

Like were they build a complete deck in a half hour??!! Gotta be some tricks to that!!

steve

Flawless Finish · 10-15-2006, 02:54 PM

Quote:

Originally Posted by Tscarborough

A write-off is not the same as an expense or deduction. A write-off is money owed that is not paid or damaged goods, for example, while an expense/deduction is a standard cost of doing business (client lunches, training expense, etc).

Taken straight from Dictionary.com:
"For example, if you spend money on dinner to take out a client, that meal is a possible write-off towards your income because you presumably discussed business opportunities during the dinner."

DeanV · 10-15-2006, 04:02 PM

I cannot take the home office deductionk, since when I go through turbotax the questions disqualify me (I think a few years ago they tightened up the home office definition). I believe that since the my office is not my primary location when I am working, it is not deductable (I think that is the reasoning the program used, I will try again this year though).

As far as meals, can you deduct meals that are for you and your workers or does it have to be clients?

camaroman2125 · 10-15-2006, 05:11 PM

That sucks dean. I write off my computer, paper/ink for printer, elect/gas,bills,gas,truck repair,phone,cell phone,and the occasional lunch for business.

BMAN · 10-15-2006, 06:36 PM

It might be nice to write a lot off but remember the less you make the less credit you qualify for....

Tscarborough · 10-15-2006, 06:41 PM

Dictionary dot com is wrong. From AccountingWords by InvestorWords.com:

write-off
Definition

To charge an asset amount to expense or loss, in order to reduce the value of that asset and one's earnings.

From http://www.ais-cpa.com/glosa.html:

Write-off: Cancellation of part or all of a balance. Costs incurred that have no future utility are charged (written-off) to an expense or loss account, not carried forward as an asset.

From http://www.accountingcoach.com/accou...g-terms-W.html
write-off:

To remove or reduce an asset amount. For example, an account receivable will be removed or written off if the customer is not able to pay the amount owed to the company.

DeanV · 10-15-2006, 06:44 PM

I should clarify, I can deduct for office materials like printer ink, etc, but it is actual office space in the home and percentage of utilities that does not seem to qualify.

Tscarborough · 10-15-2006, 06:53 PM

Let me clarify as well.

Dictionary.com is not being precise. As anyone familiar with accountants knows, they are precise by nature.

Debookkeeper · 10-15-2006, 08:46 PM

Tscarb is correct in his definitions.

I do think the original poster when mentioning a "write off" was actually referring to business related "deductions" based on what he was asking. At least, that is what I got out of it, because I have had many refer to deductions as "can I write off this expense?". I was reading between the lines.

Tscarborough · 10-15-2006, 10:41 PM

Since we have gotten past the semantics, there are a lot of daily expenses that can be deducted. The most important thing is to document everything that you plan to deduct. If you don't and claim it, your goose is cooked. If you do document it, then you can save substantial amounts of money on your final taxable income.

One of the most obvious is mileage. Your first stop should always be the jobsite closest to your residence. From that point on throughout the day, your mileage is generally deductable, provided you document it.

Another easy one is money spent on continuing education. It is not against the rules to plan your vacation around association meetings, but you do have to provide the documentation.

Home offices are easy, but only if you actually have a seperate area in your home that you use for work exclusivley (other than scanning for porn or playing solitaire, that is).

Breakfast tacos, lunches, frosty beverages for the crew, all can be deducted so long as you document that there were clients involved. That documentation is as simple as writing upon the reciept who was there.

Trade magazines, association dues, anything that you pay for to assist you in your business is a deductible expense, provided that you document it.

The same applies to advertising and charity, provided you have the paperwork on file to prove it.