And you do have to only use your computer area for work and nothing else, no chatting to friends, no bill paying that isn’t work related, etc. In my case, my kids need the computer for school homework. It’s mandatory with both of them (middle school and high school) that homework is typed out and then printed or emailed to the teacher. So for me, deducting the square footage is useless. The day will come when we can move out of here and into a home with a private office (and 2nd bathroom) but for now, we make do with what we have.

I only have a 1 BR place, but I have a section of space where my desk is. It has it’s own specific area and I use it for work. I figure up how much square footage just that space is and use that for my home office deduction. It’s my understanding that it’s legitimate as long as I use it just for my business, which I do. If I could partition it off, I would, but that’s just not possible because we rent. But it’s still a dedicated work space.

I procrastinated this year. I normally do my taxes in February. This year, I did them on the 11th. I’m going to try to keep up on things this year so I can get back to doing them early. Much less stress.

Please drop me an adrie@adriesantos.com

Much appreciated!

For example one of the trips I took to Europe was a vacation, pure and simple. But while I was on that vacation I did a bid for my mother-in-law on a project I knew I would never realistically get because I was a foreign contractor. But because I did the bid, I was able to write the entire 6 thousand dollar trip off as a business venture.

Different people will give you different advice, but my personal advice is: don’t be paranoid of the tax man. Trust your accountant, but push the limits of every single deduction to maximize your potential. If you can get away with only paying 1500-2k a year on 60k a year income, I’d say that’s doing just fine. I remember in one case my father’s company, in its early days, relied on a revolving tax system. He owned a multi-million dollar construction company as well as a dairy farm. He would burn up his excess money from the construction company in heavy equipment for the farm, thus burying the money in deductions. I remember one year his brother rose a stink because he had to pay something around 35k in taxes on 350k worth of income, while my dad cleared 1.2 million and only paid 6k in taxes because he was able to claim so many deductions.

25 years of business and never had any issues for him. I can’t speak the same for everyone, but my general opinion is that most people are way too paranoid of the IRS. As long as you know that what you are doing isn’t illegal, simply taking advantage of a loophole, you have nothing to worry about.

…Loopholes…

He’d hand us his credit card and tell us to go have lunch and he’d write it off.

Gee, I wonder why he got audited. There’s a limit to what you can get away with, and the trick is to go into it not as a “loophole” but as a “trip expense”.

E.V.E.R.Y. item I write off is physically connected to a paying income. I go into this knowing I stand a good chance of being audited. I also know I’ll be able to prove each one of the expenses I write off.

I side with Mark on this one. I had a boss who used dinners out, mileage he drove to those dinners out and every other thing he could think of. He’d hand us his credit card and tell us to go have lunch and he’d write it off. Four years later, he was audited and the stress he faced certainly wasn’t worth the money he saved. Especially not when they deemed some of these expenditures to be suspicious and charged him back taxes and penalties.

When I was running a construction company in Colorado, I had a brilliant accountant. While technically your apartment is indeed too small, if *any* portion of it is used for your office/work, then you should be able to deduct it. As I recall, the law in Colorado stated that up to 20% of your house/apartment could be considered deductible, so I just had my accountant deduct the maximum 20%.

I generally made over 55k but less than 65k…but I never had to pay taxes on more than 15-20k worth of income. The things you can write off as legitimate expenses are plentiful, and there’s nothing wrong with working the loopholes in the system to your advantage. There’s nothing unscrupulous about it. The loopholes exist. Use them to your advantage.

I deducted everything I possibly could. Cell phone bill, all my clothing, every meal I ate out (although only a percentage can be considered actual “business” meals…still, I was usually able to write off a large portion of this), all my office equipment, the gas in my vehicle, my health, vehicle, and renter’s insurance…anything and everything.

ATM I’m in a particularly interesting situation and I’m still figuring out how it works. Last year I made little/no income because we were transitioning overseas. I literally only made a few thousand over the whole year, and you don’t have to file if you make under a certain amount. This year I’m waiting to see how it ends up because as I live internationally I’m still required to file if I make over 12k USD as the head of the household, but I can make up to 80k USD from non-US sources and not have to pay a red cent. I’m trying really hard to keep the majority of my income from non-US sources so I don’t break the head-of-household cap, because I’d rather not have to pay anything if I can

But in any case…I’d find a different accountant, one who isn’t afraid to use the loopholes that exist. Remember, they aren’t illegal; they are simply little-known loopholes that most people know nothing about. If you are self-employed you can write off a slew of things that most people wouldn’t even consider. My favorite is “entertainment” expenses. EVERY time you go out for dinner, make sure you get the receipt. Have your friends give you cash, but you pay the bill. This way you can keep the maximum possible. I remember one year I was able to deduct nearly 12k USD from my overall income simply from “business meals”. Every little penny counts.

Thanks for the leads!!