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As someone who makes over 300k a year. 180k from j...
# general
f
As someone who makes over 300k a year. 180k from jobs on a w-2 and 120k from consulting on a 1099. What are some ideas to maximize deductions on the 1099 money.
m
Oh I love this question! Bring on the accountants! I think it depends a lot on industry. In general: car, driving For example, real estate: home depot or in tech: computers, software licenses Knocking out some obvious ones here
a
Business use of home
e
Solo 401(k)
You have to depreciate/amortize some items mentioned above
c
You need to be careful with some deductions. For example, from what I understand deducting for a home office makes the chances of getting audited way higher.
g
I have heard the same as @curved-toothbrush-84425 from my accountant, he said people should be careful when taking the home office deduction or a boat deduction, those 2 things increase the chance of audits to the moon.
b
@eager-smartphone-39564 if he has a work 401k can he also have a solo 401k. What's the benefits or differences
e
Indeed
The only limit that he will contend with is with respect to the $22,500 max on “employee deferrals” which will be aggregated for both work and business.
b
So why have separate ones?
e
Because the overall defined contribution plan limit of $66k can be maxed at each employment engagement.
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c
You can get the max employer contribution to a 401k at every job tax free?
Could you have multiple solo 401ks?
e
Yes to the first. Yes to the second but only if each one is owned by a separate “unrelated” entity
c
So theoretically you could start multiple freelancing businesses, have a solo 401k for each, and then put about $44k into a 401k for each of them and not pay taxes until you get distributions at 59 and a half (assuming each business only makes about 44k after expenses)?
Or are they considered related because you own all of them?
e
So unlikely that they would be considered unrelated.
Even if they were, you can only contribute about 20% of net income of the business towards the “employer” contribution
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r
Re: home office, if you take the safe harbour deduction chances of an audit are much less
m
If I have a W2 job and an LLC, can/should I take a home office deduction?
If I'm doing everything right, do I care about getting audited?
r
Off the LLC income not off the W2, although someone mentioned that there is a separate deduction for employment expenses not reimbursed by the employer with a high floor
s
@mysterious-tomato-10057 I've wondered the same thing, but I've also heard that being audited can be a real pain and that it's an experience worth avoiding
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m
I deducted my new laptop this year which was fun. Haven't really don't much more than that.
Is asking what you can deduct different than asking what I can use my business credit card for?
e
You prob should be depreciating your laptop
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r
My acct says the same, hardware should be depreciated over several years
m
My accountant may have done that. I'm not sure what he did or didn't depreciate 😅
a
Re: audit, if I have my documentation in order, and the deduction isn't too much, I assume they have bigger fish to go after.
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