[Tax Question] Can you deduct the SEO services you buy from the BST section?

[ly2 from WF]

About 1% of people get audited. The ones that do have audit flags. Being self employed is a small flag (a lot of people are self employed). People using the Home Office Deduction is definitely a Audit Flag (very few people have a legitimate home office) so its a flag (not a guarantee of an audit) however if your accountant tells you to take the deduction than take it.

The main reason I have been advised against it from 2 different Accountants is the Client or Customer Access section. This doesn't go into it to much but it touches on it. From what I understand its "strongly" encouraged to have separate entrances and parking for customers as well as signage.

The point I am trying to make is this, Your likelihood of being audited goes up just by being self employed ( but still unlikely) the use of the"Home Office Deduction" just puts you into higher risk class "less legitimate in the IRS eyes" and hence the higher potential for audit.

So to me its just not worth risking an audit when I can be aggressive with other areas of my return (mileage, travel, supplies, postage,cell phone,etc..) that are not scrutinized nearly as much.

Here is a small snippet from IRS.gov

One of my very rich friends told me the same shit. Basically the more you try to deduct and get away with the higher a chance you will get audited. He said it's better to just bite the bullet and pay the shit and don't try to cut stupid corners like deducting your home office. And since he has the best Jewish accountants money can buy, and he himself is a Jew, I listen to the advice he gives on the issue. So far...so good.

 

[avatar33]

Fuck. I don't know much about Business Taxation but I really thought a Home Office was the "less stupid" of all expenses for an online business owner. I thought Travels, Restaurants, Clothing and Entertainment were more likely to raise Audit Flags, since most people I know tend to write off so much shit in those areas it's not even funny. A friend of mine goes on Leisure Golf Trips all over Europe and South America 3-4 times a year with his wife and he writes them off. It's been over 10 years since he does this and he never got audited...

 

[dmnEPC]

Fuck. A friend of mine goes on Leisure Golf Trips all over Europe and South America 3-4 times a year with his wife and he writes them off. It's been over 10 years since he does this and he never got audited...

Ah sir those are not leisure trips, those are either Sales meetings or could be for prospecting for new business or maybe he went for training. But they are certainly not for Leisure

 

[avatar33]

^lol of course not. You get audited for declaring a legitimate home expense while others get away with deducting a snorkeling trip to Fiji. Go figure how the IRS thinks...

 

[070707]

IRS hired 25,000 new Auditors this year. I think you will see many more people starting to be audited now.

Talk to an accountant, save ALL receipts. You send money via Paypal? Print the receipt instantly, put in stack, monthly. Isn't crazy if you keep up with it.

Or just hire a monthly bookkeeper, like I did. lol

 

[DocApocalypto]

any money you spend on your business, that doesn't go in your pocket, deduct it.

 

[GerardWon]

Hello gangsters,

this might sound like a noob question, but can I include all the services I buy from the BST section as "business expenses" when filing income tax? (I'm a sole proprietor). If yes, are the paypal receipts good enough for the gov as a proof? I understand most service providers are individuals here so it's not like I can have any kind of official receipt...

Cheers

No clue -- but if audited hire those two ho's to go to the taxman and clear things up... problem solved.

 

[ARVolund]

@dmnEPC & @eliquid

I'm not sure I follow your logic with the "Home Office" deduction. If you run an online business from home (AM, SEO, Web Design, etc...) the Gov is naturally going to expect you to deduct a certain percentage of your home expenses as a biz expense. How is that an audit flag? For example, I use one big room in our apartment as my office, which is roughly 25% of the whole house in terms of area size. Why would I not deduct this? It's a major recurring expense...

I can see how it's an audit flag if you deduct 75% of your home expenses, but if it's a reasonable amount there is no reason why it would raise their eyebrows...

The reason the Home Office deduction increases your chances of being audited is that there are very specific rules for using it. Most people that claim a home office are not eligible (I remember reading 90+% at some point) so the IRS knows that most people they audit will end up paying more. Low hanging fruit from their point of view, they do audits with the idea of getting more money and history shows them that auditing returns with the home office deduction pay off.

The full rules are on the IRS website but basically if you use the space for anything else then they will not allow it, it has to be an office and nothing else.

If you qualify there is nothing wrong with taking it just make sure that all your other expenses will be able to stand the audit as well because once they decide to do an audit they are going to check everything not just the trigger.

 

[geomark]

Anybody ever get audited who runs their biz from overseas? I'm just waiting for the day when the IRS asks for receipts and I hand them a stack that aren't in English, along with some other proof of expenses that don't conform so well to the U.S. centric frame of mind (cash economy and all).