Write Offs| Tax Deductions| Self- Employed| Small Business

Sometimes I think if I were a superhero, my superpower would be bumming people out. I’m always the one to deliver bad news when it comes to write offs and taxes!

But, like any superhero, I do it for the good of humankind (especially the self-employed humans) even if it means I’m known as Major Bummer Pants.

It’s super common for people to make write off mistakes. It isn’t because they’re trying to fleece the system- it’s just because they never learned the ins and outs of write-offs.

They are doing their best to save money on their taxes, without realizing they might be putting themselves at risk of an audit. And no amount of money saving is ever worth an audit.

This is where I come in (*dun dun dun dun*): waving my bummer flag to help save you from making these fatal write off mistakes which also happen to be my arch nemesis:

It’s super common for people to make write off mistakes. Many don't know the ins & outs of them.Click To Tweet

Clothing

This is the most common write off mistake and the one that people want to fight with me about the most! Here’s the deal- the IRS rule is that you cannot write off clothing if you can wear it on the street. Period.

That means you cannot write off clothing you buy:

  For a specific business event (yes, even if you are required to wear a  gold sequin mini dress)
  To conduct your business activities (if you are a yoga teacher you cannot write off your yoga pants)
  To improve your professional appearance (sorry- employees also need to look professional so self-employed people don’t get a tax break)

What clothes can you write off? Uniforms, anything that is not considered street wear, and protective clothing like:

  Clown suit (only creepers wear this outside of work)

  Showgirl costume

  Mechanic jumpsuit with a company logo

  Hard hats

  Lab coat

All of these items are very specific to the industry and serve a purpose other than looking good or being comfortable.


Makeup/Getting Your Nails Done/ Things That Make You Look Good

I hear the argument all the time, “But I need to look good for my job so I get my hair done, go tanning, buy nice makeup, and make sure my gams are manicured.”

All of these services have a personal benefit which means the IRS isn’t going to allow it. Anything that you can walk away with is off limits.

So, even if you have your teeth whitened for a video shoot you are doing for work, you can’t write it off because you personally retain the benefit.

The no-nos of personal services are:

  Manicures and pedicures

  Haircuts

  Makeup

  Facials, brow shaping, eyelash extensions

  Tanning

  Massages because work stresses you out and it makes you more productive to be stress-free (yes- I’ve really heard this excuse)

It sucks- I know! All those things can add up. So is there *ever* an instance where you can write it off? Well…

You can write off getting your hair and make done for a photo shoot.

That doesn’t mean you bought the makeup to do for the photoshoot- that means you hired a professional to spruce you up just for the shoot. As in the day of- not a week before to go get your regular color or chop.

If you did legit hired a hair stylist and makeup artist for your shoot- you can write the cost of that service off.


Mileage to and from your main office

Writing off mileage as a self-employed people is AH-MAZING! We drive for a lot of random stuff (like to get office supplies, meet a client, have a business lunch, return office supplies, to a networking event or training, on and on) and all that randomness adds up to a nice little deduction.

Did you notice in my rambling list I didn’t mention anything about going to your office?

That’s because (get ready sad, frowny face) you can’t write off mileage from your home to your principal place of business.

If you rent an office outside of your home to see clients, do your work away from screaming kids, to make whatever crazy beautiful art you sell, or to do any other business activities, you cannot write off the mileage getting there from your home.

What if you have multiple offices or studios? Then you pick one as your principal place of business and the rest are fair game!

What about driving from your principal place of business to meet with clients or do business errands? As long as you aren’t going home, you can write it off.

Writing off mileage as a self-employed people is AH-MAZING! We drive for a lot of random stuff and all that randomness adds up to a nice little deduction. Click To Tweet


Crowd fundraising Contributions

Here’s a mistake I see a lot- people trying to pass off crowdfunding contributions as charitable contributions. In some cases, this might be true, but generally, crowdfunding is for an individual who does not count as a charity.

What counts as a charitable contribution? A contribution made to a 501(c)3 non-profit. So if you see a line that says “Make a tax-deductible donation!” or “We are a tax-exempt non-profit” you’re good to go.

What’s not a charity? Individuals raising money for their surgery, their dog’s surgery, music album, or product they’re launching.

Now, I’m not telling you NOT to give to these things- I’m all about community funding and helping each other out- I just don’t want you to get in trouble on your taxes.

Giving to an individual is not a business expense. If you are giving to a Kickstarter campaign where you get some kind of reward or incentive, that might be a business expense. It depends on the reward.

Is it a power bank for your laptop so you can work on the airplane? Then that’s an office expense.

Is it a furry pair of Bart Simpson slippers that say, “Don’t have a cow man,” when you stub your toe? File that under personal (and something that someone needs to crowd fundraise for stat!).


Volunteering Your Time

Since we’re talking about charity- let’s talk about volunteering. This is another one that people really want to write off but since I’m on bummer patrol today I’m going to explain why.

Here’s the deal- you cannot write off the value of the time that you volunteer your services.

For example, you’re a photographer who typically charges $200/hr. You volunteer for an animal shelter to take pictures of the dogs for 3 hours. You cannot write off the $600 value of your services. There’s no tax incentive for that- just the personal reward for being a really awesome person.

Now, let’s say before you go photograph dogs you buy some dog toys and treats. You also drive to the shelter and then take the shelter director out to lunch to talk about a gallery opening.

You CAN write off the toys and treats, the mileage you drove to and from the shelter, and the lunch with the director.

It’s a bit confusing. Here’s the breakdown- you CANNOT write off the actual time you spend volunteering but you CAN write off the auxiliary expenses of volunteering.

Want more on deductions (the good kind?). Don’t forget to download your Tax Write Off Cheat Sheet here!

 

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