Question:
I’m a self-employed website designer. Can I deduct the following as business expenses?
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- Laptop computer (to do design work on) |
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- Travel expenses (including plane ticket) for a photography trip |
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- Apartment rent (I work from my apartment, it has 1 room, where I do 100% of my work) |
Answer:
First: are you profitable?
If you are not, then the deduction does not do any good for the business. If you are not profitable, you are paying no taxes. It doesn’t go lower than that.
If you are not profitable, and you try to pass the deduction to you so you can take it personally, you are going down a slippery slope. If you will not be profitable, the IRS has policies in place to disallow your deduction later and have you pay all the back taxes and penalties and interest. Not good.
If you are not profitable, change that. That should be your only focus.
If you are profitable, then the laptop is expensable under section 179.
The travel, including the airfare can be deductible as long as you are confident that you can convince an IRS auditor that it was a necessary and reasonable business trip.
The apartment could be partially deductible, as long as fit within the rules.
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