Related: Robert Reich posted earlier today that Tesla paid ZERO taxes on $5 billion in sales (earnings?), so that’s just fucking great.

  • OshagHennessey@lemmy.world
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    2 days ago

    Pro tips:

    Many jurisdictions don’t require you to have a business license if your revenue is under a certain threshold and the work you do is unregulated. Basically, you can just decide you own a business at any time without filling out any paperwork.

    Housecleaning, auto mechanic, and IT consulting businesses aren’t regulated and can be used to justify 90% of common purchases. A YouTube channel is a business and can be used to write off anything you make a video about.

    Any major purchases you made throughout the year can be declared as an asset of your business. If you say you only use it for business 50% of the time, it’s practically impossible for anyone to disprove.

    Also, 50% of the money you spend on those major purchases can be declared as a business loss, which further reduces your tax obligation.

    So, let’s say you bought a PC and a 3D printer this year. You can decalre both as assets belonging 50% to your business, declare half the cost as a business expense, and declare no income from the business. You can also declare half of your gas purchases as being for your business. You’ll get a credit for the asset, and a credit for the “business loss.”

    Basically, you can create a company that has your home address as its HQ, say it didn’t earn any money, but you invested in it. Then, declare ordinary purchases as assets and investments into the company by saying you use them for business 50% of the time.

    There’s no requirement to have a business license before telling the IRS you have a business. There’s no requirement to run a business “well” and there’s no penalty for running a business badly. Receipts aren’t required to declare assets or losses, but you may need them if you’re audited. You’re unlikely to be audited due to the 50% declaration. If you are audited and you have receipts, you’re covered.

    Disclaimer: I’m not a tax professional and this isn’t advice.

    • BarneyPiccolo@lemmy.today
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      17 hours ago

      Not where I’m from. If you have a business in Florida, you must register with the state (about $130 a year), and the county (about $100 a year), and there’s state licensing, depending on your business, and that’s all over the place, but figure $350 a year. There’s lots of other charges that will come up, too. Florida’s hand is always out.

      And then you have to sign up with the Department of Revenue and submit a monthly sales tax report, even if you don’t collect sales taxes.

      Ironically, the state border sign to Florida says “Welcome to the Free State of Florida!” where NOTHING is free.

    • calcopiritus@lemmy.world
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      2 days ago

      I fell like the disclaimer should really be at the top. Specially because it is very geographically dependant and this is the internet.

      • OshagHennessey@lemmy.world
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        18 hours ago

        Maybe. On the other hand, if you choose to act on unreliable or incomplete information, that’s on you.

        Part of being a responsible adult is understanding the law and how it applies to you in any situation in which you may find yourself, BEFORE you make up your mind what you’re going to do.

    • Wiz@midwest.social
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      1 day ago

      (I’m not a professional and this is not tax advice)

      However, I have a home business pulling in a few thousand a year.

      About business losses, I think you’re partially right. The IRS has a tile that you need to show that you’re trying to make a profit, despite losses. One of the ways they do that is showing a profit over the course of a few years. (Maybe 3 out of 5 years? My memory is foggy.) But if you don’t seem like a business, then you are only allowed to deduct up to the amount that you earn.

      But yeah, year one of a business, you can definitely take a loss. And why not? The IRS is short-staffed so fewer audits.

    • cheesybuddha@lemmy.world
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      2 days ago

      I do programming as a hobby, and it’s not out of the question that some day I’ll make something that will be sold. Can I claim my gaming PC and my homelab as business expenses? As well as my electricity and intenet?

      • OshagHennessey@lemmy.world
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        18 hours ago

        As far as I understand tax law (which isn’t very far), when filling out your Schedule C, you can write off 50% of the cost of the PC and lab equipment without raising too much suspicion. You can also claim them as assets and claim depreciation on them. You can also claim the portion of electricity and internet used, unless you’re a full-time W-2 employee working from home.

        You can also film yourself doing these projects and upload it to YouTube, which means you have a video production business.

        My understanding is this is how most upper-middle class people and minor millionaires legitimately reduce their tax obligations.

      • Bosht@lemmy.world
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        1 day ago

        I’m not an expert on tax, but I can tell you from personal experience that for the company that I run, with me being the only employee, I claim anything related to the business. The grey area is what percentage it’s used for the business, I’m not sure on that part. I have a separate laptop I use for the business and when I purchased it I claimed it 100 percent. Like stated though keep your receipts to cover your ass.

    • boonhet@sopuli.xyz
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      2 days ago

      I am also not an accountant, but in my country even a failed business project is still a business project. E.g you run an IT consultancy and suddenly decide you need to do something with AI. Wellll now that gaming PC with a really over the top GPU is actually a business purchase because you NEED that VRAM. AI project didn’t do all that well? Oh well, shit happens. Keep the PC tho, maybe you’ll need it for another project soon.

      Home office is another fun one. In my country, you have to decide what % of different purchases are for business vs living use, for tax-free expense compensations. But the interesting thing is, you can go really in depth with that. 20-40% of your toilet paper could be business usage reasonably, depending on what percent of awake time is spent working vs not working.

      • OshagHennessey@lemmy.world
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        18 hours ago

        As far as I understand it, these can all be written off in America under the same pretense. The only difference is the paperwork is a lot more complicated. Most of what you’re describing is handled in the 1040 Schedule C

      • There’s a joke on a Family Guy episode where Peter starts a business, then later on he’s like “Lois we need to immediately put a desk in every room in this house”. It’s a good joke but I wondered how many people would get it.

    • Frigidlollipop@lemmy.world
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      2 days ago

      I feel like this is all well and good until you need insurance. If you damage something and get sued without insurance/LLC, they’re suing you directly instead. Dicey territory depending on what you’re being sued for.

      • OshagHennessey@lemmy.world
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        17 hours ago

        Assuming you’re actually doing work and not just using the business as a loss center, yes.

        If you’re actually doing work, it’s well worth your time and money to form an LLC.

        However, an LLC can’t deduct the same things as a sole-proprietorship. So, if you simply want a business on paper to serve as a loss center, that’s probably the better choice.

        Again, this is just MY understanding of things. I’m in no way trying to give advice or tell you what YOU should be doing, only you can decide what’s best for you.

    • Boomland Jenkins @lemmy.world
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      2 days ago

      The 2025 Big Beautiful Bill lets you write off 100% of the expense on the year you purchase it, instead of depreciating it over several years. Make big purchases, pay less tax dollars to this government.

      Disclaimer: I am not an accountant or financial advisor, do your own homework to see what qualifies in your situation.

      • OshagHennessey@lemmy.world
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        18 hours ago

        Total up all your major tech purchases for the year, divide that number in half to get your total “losses” for the year. Fill out your 1040 Schedule C, say you have an IT Consulting business, sole owner, sole proprietor, no LLC. Declare zero income, then declare your losses in the appropriate category (office expense, equipment, break room supplies, etc.). The more receipts you have, the better, in case you get audited. If you declare it, save the receipts just in case or just roll the dice and claim whatever you want, there’s barely any auditors left and they’re all busy looking at the people claiming dogs and dead people as dependents.

        Once you finish filling out your Schedule C, you should see your federal obligation reduced.

        • Sabata@ani.social
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          17 hours ago

          I wish I knew this last year when I got that GPU. Should I declare pizza and beer as income if I help bro build a PC?

        • OshagHennessey@lemmy.world
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          17 hours ago

          No.

          Printers work using ancient black magic and are powered by the tortured souls of the lost and damned. To fix them is to understand them, and to understand them is to descend into madness, becoming one of the lost souls to fuel the eldritch horror that is the ink slinger.

          Seriously though, if your printer isn’t a Brother laser printer, throw it in the trash and go buy a Brother laser printer, then write it off on your taxes. Mine has worked for years and hasn’t needed anything but a $50 toner cart every few thousand pages.

          For most people though, it’s more economical to just print at the local FedEx or Office Depot