Self employed Issue

Kgkev · 07-16-2007, 04:01 PM

I'm sure someone can help with this

My wife is self employed as a domestic cleaner. She uses the PC to do her books as file her tax return.

I need to buy more ram - Is it justified to write this off as a business expense?

Could I buy a new PC and write this off as business expense even if it will be used as a family PC?

I'm in the UK!

Thanks for your help

ebackhus · 07-16-2007, 04:25 PM

If she uses it as part of running her business, ie. keeping invoices and contracts, business-related correspondence, etc., then it can be written off in most cases. Speak with your local tax assessor to be certian before you try, lest you bit accused of tax fraud.

mimo2005 · 07-16-2007, 04:41 PM

Quote:

Could I buy a new PC and write this off as business expense even if it will be used as a family PC?

I did it , same for my cellphone wich is for work and personal stuff .

~~Wozer~~ · 07-16-2007, 07:27 PM

you can indeed do what you wish to do....and you can of course write off any software which you purchase that is business oriented...

now, there is one catch...there used to be, and I think still is, a maximum amount of $ that can be written off for a single item...if the cost is above that you will have to depreciate it...now, if you buy parts to build a computer, then you are pretty safe unless you spend $800 for the cpu! (I think the cutoff limit is ~$700)

your wife should declare your home as her 'shop' so that any traveling from the 'shop' is business related and therefore deductible....you can also declare the area of the computer as an office, though this IS a risky proposition as many home offices break the rules for the IRS and greatly increase the odds of being audited..so my advice is to NOT declare a home office....

when in doubt, talk to a good CPA....even go so far as to have one do your taxes once, then copy the style for later years....

**jen56** · 07-16-2007, 07:38 PM

Yes you should be able to write just about anything of in Tax, that is used for running a business from home. Here in Oz you can.

**gistek** · 07-17-2007, 10:35 AM

Tax laws vary a lot, so it's worth having someone local look into what you can and can't deduct.

For instance, I ran a home based business for a short time. Most of my work was done on the dining room table and the rest was done at my computer desk. I was told to estimate the square footage of the work areas and the percentage of time I used those areas for business. I was then able to deduct a percentage of my real estate taxes based on the amount of time I used the space for work. I also estimated the percent of time the computer was used for work and depreciated that percentage of the computer costs over 3 years. Any repair or upgrade costs were 100% deductible during the year they occurred.

Since it's a cleaning business, remember to deduct 100% of the space used to store cleaning supplies.

Since she probably uses the auto to go to her clients, be sure to deduct the mileage allowance (it's a lot easier than calculating the percent of petrol and maintenance costs and depreciating the auto's value).

Kgkev · 07-17-2007, 02:04 PM

The storage space is the size of a mop bucket so not a great deal.

Milage allowance is working good - Especially as we can claim 40p per mile and it only costs about 15p!!

Thanks for the advise - I'll definatly include my new Ram on her tax return!

07-16-2007, 04:01 PM	#1 (permalink)
Kgkev Registered User Join Date: Aug 2006 Location: UK Posts: 229 OS: XP My System	Self employed Issue I'm sure someone can help with this My wife is self employed as a domestic cleaner. She uses the PC to do her books as file her tax return. I need to buy more ram - Is it justified to write this off as a business expense? Could I buy a new PC and write this off as business expense even if it will be used as a family PC? I'm in the UK! Thanks for your help

07-16-2007, 04:25 PM	#2 (permalink)
ebackhus Manager, Design Join Date: Apr 2005 Location: SATX Posts: 14,286 OS: WinXP Pro SP3/Windows 7 RTM My System Blog Entries: 28	Re: Self employed Issue If she uses it as part of running her business, ie. keeping invoices and contracts, business-related correspondence, etc., then it can be written off in most cases. Speak with your local tax assessor to be certian before you try, lest you bit accused of tax fraud. __________________ ----------------------------- There are no dumb questions, unless a customer is asking them. Help in the fight against cancer and other serious illnesses.

07-16-2007, 07:27 PM	#4 (permalink)
~~Wozer~~ Troubled Join Date: Oct 2004 Posts: 1,038 OS: 2kpro/XP pro/MCE	Re: Self employed Issue you can indeed do what you wish to do....and you can of course write off any software which you purchase that is business oriented... now, there is one catch...there used to be, and I think still is, a maximum amount of $ that can be written off for a single item...if the cost is above that you will have to depreciate it...now, if you buy parts to build a computer, then you are pretty safe unless you spend $800 for the cpu! (I think the cutoff limit is ~$700) your wife should declare your home as her 'shop' so that any traveling from the 'shop' is business related and therefore deductible....you can also declare the area of the computer as an office, though this IS a risky proposition as many home offices break the rules for the IRS and greatly increase the odds of being audited..so my advice is to NOT declare a home office.... when in doubt, talk to a good CPA....even go so far as to have one do your taxes once, then copy the style for later years....

07-16-2007, 07:38 PM	#5 (permalink)
jen56 TSF Enthusiast Join Date: Dec 2006 Location: Elizabeth. South Australia. Australia Posts: 2,649 OS: XP My System	Re: Self employed Issue Yes you should be able to write just about anything of in Tax, that is used for running a business from home. Here in Oz you can. __________________ GO AHEAD MAKE MY DAY!!! Regards Jen

07-17-2007, 10:35 AM	#6 (permalink)
gistek Folding Along Join Date: May 2007 Location: PA, USA Posts: 1,912 OS: Bobbi=xp, sp3 Muse=Vista Home Premium	Re: Self employed Issue Tax laws vary a lot, so it's worth having someone local look into what you can and can't deduct. For instance, I ran a home based business for a short time. Most of my work was done on the dining room table and the rest was done at my computer desk. I was told to estimate the square footage of the work areas and the percentage of time I used those areas for business. I was then able to deduct a percentage of my real estate taxes based on the amount of time I used the space for work. I also estimated the percent of time the computer was used for work and depreciated that percentage of the computer costs over 3 years. Any repair or upgrade costs were 100% deductible during the year they occurred. Since it's a cleaning business, remember to deduct 100% of the space used to store cleaning supplies. Since she probably uses the auto to go to her clients, be sure to deduct the mileage allowance (it's a lot easier than calculating the percent of petrol and maintenance costs and depreciating the auto's value). __________________ I am not a computer professional, My advice comes from personal experience and/or friends who are computer professionals. Learn By Doing Un-versity Interested in Search and Rescue? Check out the Civil Air Patrol. Come Fold with us. TSF Folding@Home Team

07-17-2007, 02:04 PM	#7 (permalink)
Kgkev Registered User Join Date: Aug 2006 Location: UK Posts: 229 OS: XP My System	Re: Self employed Issue The storage space is the size of a mop bucket so not a great deal. Milage allowance is working good - Especially as we can claim 40p per mile and it only costs about 15p!! Thanks for the advise - I'll definatly include my new Ram on her tax return!