Time is running out to file our taxes, which means it’s time to stop using our W-2s and 1099s as coasters and try to get our act together. There’s just one problem: We have no idea what we’re doing.
If you’re like us and have been cobbling together your income from various freelance assignments, dog walking jobs, cater-waiter gigs and competitive tickling videos, doing your taxes can feel overwhelming. Rather than risking the tax man’s wrath trying to DIY our own financials, we turned to the pros at Donofrio Inc.
We stopped by their Brooklyn office, where they were kind enough to answer some of our most pressing (and preposterous) tax questions.
What’s the biggest mistake freelancers make when preparing their taxes?
The biggest mistake freelancers make is not asking for receipts when working on various projects.
Now, let’s say you spilled a few too many IPAs on your receipts, or maybe used them to slip your number to that hottie at the end of the bar or perhaps used them all on your papier-mâché Trump for the Women’s March. Can you just use credit card or online bank statements?
The IRS requires receipts. If you get audited, any expense without a receipt could be disallowed, and it would be an increase to your taxable income. The credit statements prove you made the payment, but that is not enough to get the deduction. The receipts are needed to show documentary evidence of what was purchased.
A lot of freelancers are working from home (in their underwear, vaporizer in hand, but we’re pretty sure the government doesn’t need to know that part, right?). Can they deduct the cost of their rent and other utilities?
Self-employed people can claim a home office deduction, but only the space needs to be exclusively used for business. If it is exclusively used for business, then you take the square footage of the office used exclusively for business compared to the total space and you are allowed to take the proportional piece of the expenses like rent, utilities, insurance, etc. as a business deduction.
What about my photoproject capturing dogs that look like 1970s TV dads? I mean, I think it’s going to be a really popular tumblr one day, and I had a “gallery show” at the bodega on my block. Are there specific tax breaks for artists?
Independent artist must be producing revenues to show that this is a business with a profit motive. Then you can take expenses that are related to the artistic performances as business expenses.
We’ve been sending envelopes full of cash and disdain to Sallie Mae all year to pay off our student loans. Does that earn me any sympathy from the government?
Deductions for student loans can be up to $2,500.00, but if you make up to $80,000.00 single and $160,000.00 married then you will not be able to take these deductions. If the student is still going to school, they will need to get a 1098-T to show the tuition they paid, and then there are various credits and deductions available.
Haha. If we made $80,000 a year, we wouldn’t be writing for a site called “Brokelyn,” (and if we were married we wouldn’t spend days at a time working from home without changing our underwear). But surely we can’t be the worst client you’ve dealt with. What’s the weirdest stuff you’ve seen deducted?
Doggie poop bags and dildos.
Wow. I think I know the theme of my next tumblr.
Still need help with your taxes? Contact Donofrio Inc. today.