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Did you pay your taxes?
(sh.itjust.works)
Related: Robert Reich posted earlier today that Tesla paid ZERO taxes on $5 billion in sales (earnings?), so that’s just fucking great.
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.
(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.
shit I should have claimed my laptop
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.
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?
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.
I fell like the disclaimer should really be at the top. Specially because it is very geographically dependant and this is the internet.
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.
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.
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.
I declare my self an IT consultant. Now what?
Can you fix my printer?
Do you really need to print? That will be $500.
Sure! bodily throws it out the window
Now you get pay the employer half of your social security tax!
Bold of you to assume I have the charisma to convince someone to pay me.