Black Friday is here, and with it a very crazy shopping season. You may be spending quite a bit of money on different gifts but one of the biggest selling categories during this season is electronic devices such as computers, tablets and smartphones.
When you are making your purchases this season, think of what are some of the things you could purchase for your office or work. Big ticket items like electronics, sometimes cost hundreds of dollars and could hold a tax write off. However, you need to be careful if you use these items for personal use since this could potentially get you in trouble with the IRS if you claim them as a deduction.
We found an excellent article by Entrepreneur magazine that details what consists personal use since this can sometimes be a gray area.
Some of the highlights from the article include:
"Tax Write-Off: Cell Phone Bill
If you use a cell phone as part of your business, this could be a big deduction for you. So don't make the mistake of mixing business with pleasure by sneaking too many personal calls onto your cell phone bill.
* Expert Opinion: "Because of the way a cell phone can be used, it's come under scrutiny, so people need to keep good records and keep their actual telephone bill so they can demonstrate that a majority of the calls were business calls,"
* How to Do It Right: Take a look at your cell phone bill to make sure you receive an itemized report. Because cell phones are considered listed property, you need to keep detailed records of their use. In the case of a land line, it's a good idea to have a separate phone number for your business since the IRS won't let you allocate the cost of a single phone in your home to your home office.
Tax Write-Off: Home Office Computer
It's not a good idea to mix your business world with your personal life. So experts recommend never using your home office computer for personal tasks if you can help it.
* Expert Opinion: "If this is the only computer in your house, you'll have to calculate the percentage of total time you use it for business purposes,"
* How to Do It Right: Ideally, your best option is to purchase a laptop and dedicate it to being your personal computer. This way you can avoid any messy situations come audit time."
In other words, it’s never really a good idea to mix personal use of electronics when it comes to taking them as a tax deduction, but if you choose to get something with the intention of using it exclusively for work then by all means we encourage you to save some money this Black Friday and hopefully get a nice deduction once tax time comes around.
For more tips and tricks don’t forget to visit
www.AccountingWorksSolutions.com
or give us a call at
(804) 915-7040
To read the full article from Entrepreneur Magazine click here
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