anerrorhasoccurred Wrote:
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> I am no accountant so take my advice as it is...
>
> I have talked to my accountant and here is what he
> has told me:
>
I am an accountant, and you have a good one. He is doing his best to keep you on the straight and narrow.
The general rule for business deductions is that they are "ordinary and necessary" expenses for your business. Your gaming computer is not "necessary" for the business of mystery shopping.
A smart phone might be -- yes, even that 6S -- but then you have to look at did you buy it for the business or did you buy it to play with and might snap a picture or two with it on a mystery shop.
And then, as your accountant pointed out, some things have to be prorated -- what percent of your calls and texts are mystery shop related (very few, in my experience)? What percent of your time on your computer is spent entering reports versus posting on Facebook? I use my phone for several businesses; I don't write it off against mystery shopping because I already write it off against my accounting business.
If you weren't using it for business and couldn't write it off, would you have bought it anyway? If yes, it's probably not a business expense. There's your acid test. Don't buy a toy and try to figure "how can I write this off? I'll say I used it on a mystery shop" but if you buy a smartphone for mystery shopping, it's okay to also make personal calls with it. If you deduct 75% or less as a business expense, generally you will be okay.
Unless your car is new and you can take a lot of depreciation, *usually* you'll do better with the standard mileage deduction. It includes a component for your gas, tires, depreciation, repairs, insurance, and other incidentals based on annual averages. If you have a very expensive car, one that uses a lot of gas, or one that requires a lot of repairs, actual expenses may be better.
Keep in mind, when you sell a business vehicle, you have to figure gain or loss based on your "basis," which is the purchase price minus any depreciation you took. If you wrote off collectively more than you paid for the car, you may find yourself paying tax on the sale.
Best to run your personal scenario past a tax professional to make sure you are optimizing your tax situation. There are a lot of decisions that can only be made if you consider your entire situation, not just the mystery shopping part.
Time to build a bigger bridge.