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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
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Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Is there an easily accessible list of tax deductions and liabilities

Customer Question

Is there an easily accessible list of tax deductions and liabilities applicable to independent consultants (based in New York state)? Also, I transferred back from overseas (where I had bona fide residence in Egypt) as of July 1 to pursue consulting opportunities based from NY - can I deduct for my relocation expenses?
Submitted: 6 years ago.
Category: Tax
Expert:  Ed Johnson replied 6 years ago.

DearCustomer

 

Self employed consultants in fact may take relocation expenses. Please read the information at this link for self employed safer harbor requirements to qualify for the relocation benefits.

 

http://www.irs.gov/taxtopics/tc455.html

 

Here is a check list I put together for you:

  1. Transportation and vehicles: Deduct actual costs or standard mileage, which ever is more for business use miles. must have mileage log. AND if you take actual expenses you must have receipts. You must apportion between personal and business and commuting use. You can also take depreciation for your vehicle based on the apportioned miles.
  2. Home Office: Anything used in the operation of your office, whether at an office, or in the home office, is tax deductible. Just keep receipts. Must apportion home office from the main home.
  3. Bank charges and interest.
  4. Business Gifts: 50% not to exceed 50 dollars.
  5. Health Insurance: Any amounts of premiums you pay for your self employment are deductible. This included medical, life, and dental.
  6. Charitable contributions:
  7. Professional Fees and licenses.
  8. Depreciation
  9. appotioned cell phone costs

You can read more about these at: http://www.irs.gov/pub/irs-pdf/p535.pdf

 

Home office: http://www.irs.gov/publications/p587/index.html

 

 

 

 

 

 

Customer: replied 6 years ago.
Hi there, just one further question-what about trips out of state (or international - since I am an international development consultant) that are primarily for pursuing new business. Are these valid expenses or do they need to be broken out somehow (by days worked?) Same for rent, since I work from home - how do I break down rent expenses for work?
Thank you
Adina
Expert:  Ed Johnson replied 6 years ago.

Dear Adina,

 

Thank you for gettting back to me.

 

For your trips, these can be for business expenses. But you have to apportion them between personal and business use.

 

the following publication will describe for you what expenses are considered business expenses and to what portion. for example:

 

50 percent of one meal a day, meals for clients.

lodging expenses and mileage, etc.

 

http://www.irs.gov/pub/irs-pdf/p463.pdf

 

Regarding rent. The publication for which I gave you a link for home office expenses addresses rent. Assuming you have a dedicated office space in your home, then you determine the percentage of floor space of the office, and take that percentage of rent as a home office expense.

 

for example; Assume an 1800 square foot home. The office space is a 10 X 12 room, or 120 square feet. the formula for the home office rent expnese is: 120/1800 X rent.

 

 

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Ed Johnson
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GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee